Strong brands and a balanced mix of direct retail, e-commerce and wholesale resulted in a “strong” first quarter for Oxford Industries, which reported a 19% increase in net sales to US$420m. Gross margin increased 130 basis points to 65.5% thanks to lower freight costs and improved initial product margins for the Johnny Was business. Net earnings climbed to $58.5m from $57.4m a year earlier.
Despite this, CEO Tom Chubb said the company is being cautious in its outlook: “While the year started strong, as the quarter progressed, we did see macroeconomic pressures drive the consumer to become more cautious in her discretionary spending and a high level of promotional activity within the marketplace. In light of these factors, we are moderating our growth forecast for the year.”
J.Jill saw sales and earnings slide in its first quarter as consumers tightened their spending habits. Total net sales were down nearly 5% to US$149.4m, while comparable sales, including store and direct-to-consumer sales, fell by 2.7%. Gross margin improved to 72% from 69.7% a year earlier thanks to lower freight costs, but earnings slumped to $4.6m from $14.4m.
CEO Claire Spofford said: “Our first quarter results demonstrate the ongoing execution of our disciplined operating model especially as we anniversaried a strong comparison to last year. Our customer continues to gravitate to the newness we are flowing regularly in our assortment, but has become increasingly discerning with her spending decisions in light of the evolving macro environment. As we move into the remainder of the year, we will maintain our disciplined approach to managing the business as we continue to navigate a dynamic environment.”
Victoria’s Secret & Co
The volatile market environment continued to weigh on results for Victoria’s Secret as it reported a slump in earnings in the first quarter to US$1m from $81m a year earlier. Operating income was $28m compared to $94m in the first quarter of 2022. Net sales, meanwhile, were down 5% to $1.41bn, while total comparable sales decreased 11% in the quarter.
CEO Martin Waters said: “The first quarter continued to be a volatile macro environment for our customer and as the quarter progressed business became more challenging. Sales were in-line with our original expectations; however, we were more promotional than planned and ended the quarter at the lower-end of our adjusted operating income guidance. Sales performance was particularly challenging in our core categories where there was significant decline in the overall stores and digital intimates market in North America. Inventory levels in our Victoria’s Secret and PINK business ended the quarter down low-double digits compared to last year and we are prudently positioned as we move forward.”
G-III Apparel Group
G-III Apparel has raised its full-year guidance, despite booking a drop in first-quarter sales and earnings. For the quarter ended 30 April, net sales were down 11.9% to US$606.6m from $688.8m a year earlier. Net income amounted to $3.2m compared to $30.6m in the prior year’s quarter.
The company, however, raised its guidance for the fiscal year ending 31 January 2024. It expects net sales of approximately $3.29bn and net income between $125m and $130m, compared to net sales of $3.23bn and a net loss of $133.1m for fiscal 2023.
CEO Morris Goldfarb said: “For the first quarter of fiscal 2024, we exceeded both our top and bottom line guidance with non-GAAP net income per diluted share of $0.13, exceeding the high end of our guidance. We made progress rightsizing our inventory position, which sequentially decreased by $80 million, while our gross margins were significantly better than last year’s first quarter.”
Omnichannel retailer Macy’s has reported net sales of US$5bn for the first quarter of 2023, down 7% versus the first quarter of 2022. This included both brick-and-mortal sales and digital sales, which decreased by 6% and 8%, respectively.
EBITDA was $466m as opposed to $676m in the same period last year. Net income fell from $286m to $155m.
CEO Jeff Gennette said the retailer planned the year assuming the economic health of the consumer would be challenged, but starting in late March, demand trends weakened further in discretionary categories.
He added: “We have moved quickly to take the appropriate actions to meet current consumer demand and manage our expenses. Our revised guidance reflects incremental clearance markdowns to address excess spring seasonal merchandise in the second quarter, along with adjustments to the category composition and inventory levels in the back half of the year.”
The retailer pointed out the company’s updated earnings guidance also includes the benefit of an incremental $200m of cost savings identified as part of ongoing expense management that is expected to impact both gross margin and SG&A expense.
Victoria’s Secret & Co (VS&Co)
For the first quarter ended 29 April 2023, VS&Co reported net sales of $1.40bn, a decrease of 5.1% compared to net sales of $1.48bn in the previous year.
The operating income decreased from $94.12m to $28.27m. While, the net income plunged to $3.81m in comparison to $76.14m in the same period last year.
Martin Waters, chief executive officer at VS&Co, pointed out the first quarter continued to be a volatile macro environment for its customers, except China which positioned itself as a particular “bright spot.”
Waters continued: “As the quarter progressed business became more challenging. Sales were in-line with our original expectations; however, we were more promotional than planned and ended the quarter at the lower-end of our adjusted operating income guidance. While the challenging environment is likely to continue for the balance of 2023, we remain steadfast and focused on the three pillars of our long-term strategy: strengthen the core, ignite growth and transform the foundation.
“We are executing against initiatives in each pillar to change the trajectory of our business as the year progresses, including: new bra launches, reimagining our merchandise positioning and strategy for PINK, full company rollout of our new customer loyalty programme, new customer experience initiatives in our digital technology, and further expansion of our successful store of the future format just to name a few.”
The company said it is focussed on repositioning efforts and strategic growth plans.
TK Maxx owner TJX saw net income surge to $891m during the first quarter from $587m a year earlier as sales increased. Last year’s comparative quarter saw a $218m impairment charge on an equity investment which this year’s figures benefitted from. Sales rose to $11.8bn from $11.4bn a year earlier.
Ernie Herrman, CEO and president of The TJX Companies, Inc., said: “Our pretax profit margin and earnings per share both significantly exceeded our plan and our 3% comparable store sales increase was at the high end of our plan. Our comp sales growth was driven by an increase in overall customer traffic and a 5% comp sales increase at Marmaxx, our largest division. HomeGoods’ comp sales were down following extraordinary growth during the pandemic. TJX Canada and TJX International both delivered comp sales growth and customer traffic increases. With our above-plan profit performance, we are raising our full-year guidance for both pretax profit margin and earnings per share. The strength and flexibility of our off-price business model, depth of our organisation’s expertise, and our wide demographic reach all give me great confidence in our ability to continue to succeed in today’s retail environment.”
Global lifestyle brand Allbirds recorded a decrease of 13.4% in its net revenue to $54.4m for the first quarter ended 31 March 2023. This was primarily due to a decrease in average selling price, driven by promotional activity and a higher mix of third party sales, and an estimated $1.2m negative impact from foreign exchange (FX).
Net losses amounted to $35.2m compared to $21.9m in the first quarter of 2022. While the adjusted EBITDA was a loss of $21.7m, as opposed to a loss of $12.2m in the previous year.
Joey Zwillinger, co-founder and CEO of Allbirds, explained: “Our teams are executing well against our strategic transformation plan designed to reignite growth, improve capital efficiency and drive profitability. Our mission to create better things in a better way, guided by our Super Natural Comfort northstar, remains at the forefront of everything we do at Allbirds as we advance our vision to build a 100-year brand.”
For the first quarter ended 1 April 2023, Wolverine Worldwide’s total revenue declined 2.5% from $614.8m to $599.4m year-on-year basis and declined 0.5% on a constant currency basis.
While, EBIT or Earnings before income taxes grew from $12m to $28.3m and the net earnings rose from $8.4m to $18m.
Brendan Hoffman, president and chief executive officer of WWW, said: “We are encouraged by the progress we have made to execute on our strategy for long-term revenue growth and profitability increases. As laid out previously, the strategy includes building stronger brands that resonate more powerfully with our consumers, distorting investment to our growth brands and extending our brands from their core businesses into large, fast-growing adjacent markets and categories.”
For the quarter ending 1 April 2023, Hanesbrands‘ net sales fell 11.8% from $1.58bn to $1.39bn. This also includes a $31m unfavourable impact from foreign exchange rates, a decrease of 12% compared to last year’s first-quarter results.
Similarly, the operating profit was down to $57.32m from $170.5m, showcasing a 66.4% change. The company recorded a net loss of $34.40m as opposed to net profit of $118.7m in the previous year.
Steve Bratspies, CEO of Hanesbrands, said the company delivered first-quarter results in-line with its outlook, generated positive cash flow and reiterated its full-year outlook.
Sharing guidance for the second quarter of 2023, he added: “the company’s outlook continues to reflect, but is not limited to, the following assumptions: a muted consumer demand environment given the continued macroeconomic uncertainty; first-half margin pressure as it continues to sell through its higher-cost inventory; and year-over-year improvement in second-half margins, particularly the fourth quarter, as lower-cost inventory currently being produced is sold and it anniversaries last year’s manufacturing time-out costs related to its inventory reduction initiative in 2022.”
Hanesbrands pointed out it has generated positive free cash flow and reduced inventory; expanded innovation globally and completed refinancing its 2024 maturities.
Kontoor Brands‘ revenue for the first quarter decreased 2% to $667.1m compared to previous year.
The revenue increases, as the company explained, were more than offset by decreases in international wholesale, primarily driven by the continued impacts of covid-policy changes in China.
Operating income fell by 12% from $108.2m to $95m. This was attributed to higher inflationary pressures on input costs and geographic mix, as well as impacts from proactive actions in managing internal production, including downtime.
Similarly, net income was down 18% to $66.3m as opposed to $80.8m last year.
Scott Baxter, president, CEO and chair of Kontoor Brands, highlighted that increases domestically were muted by expected softness in international markets.
Baxter added the company is reaffirming its 2023 outlook despite the uneven backdrop.
For the first quarter ended 31 March 2023 Rocky Brands reported a decline of 33.9% in net sales from $167.0m to $110.4m.
Income from operations fell to $4.2m from $13.2m, while the company recorded a net loss of $0.4m compared to the net profit of $7.3m it reported in the previous year.
Rocky Brands chairman, president and chief executive officer, Jason Brooks explained: “We experienced positive sell-through with many of our key accounts during the first quarter. Unfortunately, our wholesale performance didn’t translate into increased sell-in as many of our retail partners are in the process of working down elevated inventory levels and have recently adopted a more cautious approach to reorders due to the current economic backdrop.”
Brooks said that in response to more challenging market conditions, the brand is taking actions to reduce expenses and protect profitability.
For the first quarter ended 31 March 2023, Columbia Sportswear’s net sales increased 8% to $820m, compared to the first quarter of 2022.
The company explained that the increase in net sales primarily reflects earlier shipment of Spring 2023 wholesale orders and direct-to-consumer (DTC) growth.
Columbia Sportswear reported a decrease of 33% in the operating income to $56.4m. The net income also fell by 31% to $46.2m in comparison to the previous year.
Chairman, president and chief executive officer Tim Boyle said: “After three years of pandemic-related supply chain constraints, it’s gratifying to see that our wholesale on-time delivery rates have returned to pre-pandemic service levels.
“We were able to generate healthy net sales growth, up 8% year-over-year, as consumer demand remained strong in many areas of our business. First quarter results highlight the importance and value of our diversified global business model.”
Boyle added that the company will be executing a plan to reduce inventory levels, while focusing on profitability, moving forward.
Skechers announced the financial results for the first quarter (Q1) ended March 31, 2023, with the brand’s quarterly sales recorded at $2bn, a year-over-year increase of 10%.
Earnings from operations rose 27.1% to $224m. While, the net earnings increased by 32.4%, from $121.2m to $160.4m.
David Weinberg, chief operating officer of Skechers, called this increase in sales a milestone for the brand and attributed it to the broad strength in most markets globally, including regional sales improvements of 21% in both EMEA and APAC, which includes the growth of 3% in China.
He added that the US-based footwear brand plans to reach $10bn in annual sales by 2026.
Crocs reported an increase of 33.9% in revenues from $660.1m to $884.2m for the first quarter of 2023.
Income from operations recorded a 98% increase to $234.9m, while, net income also saw an increase from $72.8m to $149.5m.
Andrew Rees, chief executive officer at Crocs, said the “exceptional” first quarter results are a testament to the strength of its brands.
Sharing the company’s outlook, Rees explained: “We are raising our 2023 revenue growth outlook to now be 11% to 14%, resulting in revenues of approximately $4.0bn, reflecting our confidence in our ability to continue to gain market share, deliver best-in-class profitability, and generate strong cash flow.”