It’s been a mixed bag of holiday sales filings from US apparel and footwear brands and retailers as Target‘s holiday sales failed to meet company expectations but Urban Outfitters reported record results. Elsewhere, L Brands has lowered its fourth-quarter earnings guidance and Kohl’s is now expecting fiscal 2019 diluted earnings per share to be at the low end of its guidance range.
Target Corp
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US department store retailer Target Corp said comparable sales grew 1.4% in the November/December period, on top of 5.7% comp growth last year. The Minneapolis-based company added comparable sales growth was driven primarily by traffic, combined with a small increase in average ticket. Comparable digital sales grew 19% during the holiday season, while market share continued to grow across many of its core merchandise categories, including apparel. Clothing sales in the period were up by about 5%.
CEO Brian Cornell said: “We faced challenges throughout November and December in key seasonal merchandise categories and our holiday sales did not meet our expectations. However, because of the durability of our business model, we are maintaining our guidance for our fourth-quarter earnings per share.”
Fourth-quarter comparable sales growth, meanwhile, is expected in line with the 1.4% performance during the November/December period, compared with the prior range of 3-4%. This would translate to full-year comparable sales growth of more than 3%. Target added the quarter on track to be the company’s 11th straight quarter of comparable sales growth.
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Zumiez
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By GlobalDataZumiez has announced a 6.8% rise in comparable sales for the nine-week period ended 4 January, compared to a 4% increase in the prior year. Based primarily on stronger than expected quarter-to-date sales, the company is increasing guidance and now expects comparable sales to increase by about 6% for the quarter, with earnings per share between US$1.34 and $1.38. This compares to previous guidance of comparable sales growth between 2% and 4%, with earnings per share between $1.26 and $1.32. Zumiez plans to report fourth-quarter 2019 results on 12 March.
Urban Outfitters
Urban Outfitters has reported record holiday sales for the two months ended 31 December. Total company net sales increased 2.9% over the same period last year. Comparable retail segment net sales rose 3%, driven by growth in the digital channel, partially offset by negative retail store sales. By brand, comparable retail segment net sales were up 8% at Free People and 5% at the Anthropologie Group but decreased 1% at Urban Outfitters. Total retail segment net sales increased by 3%. Urban Outfitters said Free People’s “exceptional” retail segment performance was driven by strong, full-price sales, as the brand was less promotional during the holiday season. It added Anthropologie and Urban Outfitters businesses were driven in part by increased promotional activity in apparel, which will put greater pressure on the company’s fourth-quarter gross profit margin than originally anticipated. Meanwhile, wholesale segment net sales fell 9% due to an 11% decrease in Free People, which was greater than projected.
L Brands
L Brands has lowered its fourth-quarter earnings guidance on the back of a 3% comparable sales decline over the Christmas trading season. Net sales for the nine weeks to 5 January were also down, falling to US$3.91bn from $4.07bn last year. The company said it now expects to report fourth-quarter earnings per share of about $1.85 compared to its previous guidance of about $2.
Kohl’s
US retail chain Kohl’s Corporation has seen a 0.2% drop in comparable sales for fiscal November and December 2019 combined over the same period last year. Based on the holiday sales performance, Kohl’s now expects fiscal 2019 diluted earnings per share to be at the low end of its previously announced guidance range of US$4.75 to $4.95. This guidance excludes $0.22 per diluted share related to the extinguishment of debt and impairments, store closing and other costs recognised in the first nine months of 2019.
CEO Michelle Gass said the company continues to see momentum in key areas including its digital business, active, beauty and children’s, and a solid performance in footwear and men’s. This was, however, offset by softness in women’s, which Gass said the business is working with speed to address.
JCPenney
US retail giant JCPenney has reported a 7.5% drop in comparable-store sales for the combined nine-week period ending 4 January. Adjusted comparable store sales, which exclude the impact of the company’s exit from major appliance and in-store furniture categories, decreased 5.3%. The company reaffirmed its financial guidance for full-year fiscal 2019 and continues to expect comparable store sales to fall in the range of 7-8%. Adjusted comparable store sales are forecast to be down by between 5-6%.
Macy’s, Inc
November/December 2019 comp sales at Cincinnati-based Macy’s, Inc were down by 0.7% on an owned basis and by 0.6% on an owned plus licensed basis. CEO Jeff Gennette said the company’s performance during the holiday season reflected a strong trend improvement from the third quarter, with customers responding to its gifting assortment and marketing strategy, particularly in the ten days before Christmas.
The retailer has, however, confirmed it is to close 28 Macy’s locations and one Bloomingdale’s store “in the coming weeks.”
