Here are the latest Q1 filings from US footwear and apparel firms:
Steve Rendle, VF’s CEO said the company delivered solid top-line results in Q1, ahead of its initial expectations, led by strong consumer engagement with its outdoor, streetwear and active brands amidst a softer consumer environment and inflationary pressures. “Importantly, we are maintaining our operating outlook for FY23, a testament to the resiliency of our purpose-built family of brands,” he noted.
For the three months to 2 July, VF Corp said revenue increased 3% (up 7% in constant dollars) to US$2.3bn driven by increases in the EMEA and Americas regions partially offset by a decline in the APAC region primarily due to Covid lockdowns in China. The North Face revenue amounted to $0.5bn, up 31% (up 37% in constant dollars) on the prior-year period, while revenue at Vans, was down 7% to $0.9bn, down 4% in constant dollars. VF Corp reported a net loss of $56m for the period, compared to net income of $324.2m last time. Gross margin decreased 260 basis points to 53.9%, primarily driven by mix and higher freight costs partially offset by price increases. On an adjusted basis, gross margin was down 260 basis points to 54.1%.
Total VF revenue for the full year is expected to be up at least 7% in constant dollars, unchanged from the previous outlook.
Department store retailer Macy’s reported net sales of US$5.35bn for the first quarter of 2022, up from $4.71bn a year prior. Comparable sales were up 12.8% on an owned basis and up 12.4% on an owned-plus-licensed basis. Digital sales increased 2% year-over-year, while digital penetration was 33% of net sales, a 4-percentage point decline from the first quarter of 2021. Net income, meanwhile, amounted to $286m, compared to $103m a year prior, while gross margin for the quarter was 39.6%, up from 38.6% in the first quarter of 2021.
Caleres saw net sales rise 15.1% to US$735.1m for the three months to the end of April. The footwear firm reported a 3.4% sales decline in the Famous Footwear segment and a 46.1% sales increase in the Brand Portfolio segment. Direct-to-consumer sales represented approximately 65% of total net sales. Net earnings of $50.5m compared to $6.1m in the first quarter of fiscal 2021.
“Caleres had an outstanding start to the year, executing at a high level and delivering record first quarter sales, gross profit margins and earnings despite significant and ongoing macro-challenges,” said Diane Sullivan, CEO.
Burlington Stores CEO Michael O’Sullivan said: “We are disappointed with our first-quarter results. We were up against 20% comp growth from 2021 so we had planned for a mid-teens comp decline, but we missed this plan. The biggest driver of this sales miss was that inventories were too low and unbalanced in February and March. We raised inventory levels during the quarter, in line with last year, and this drove an improvement in our comp trend.”
Total sales decreased 12% compared to the first quarter of Fiscal 2021 to US$1.93bn, while comparable store sales decreased 18% compared to the first quarter of Fiscal 2021. Net income was $16m, down from $171m last time. Adjusted net income fell to $36m from $176m, while gross margin was 41% vs. 43.3% for the first quarter of Fiscal 2021, a decrease of 230 basis points.
Guess, Inc CEO Carlos Alberini said the company is very pleased with its first-quarter results to 30 April which exceeded expectations for top-line and operating performance. Total net revenue for the first quarter of fiscal 2023 increased 14% to US$593.5m from $520m in the same prior-year quarter. In constant currency, net revenue increased by 21%. Net earnings attributable to Guess, Inc for the period amounted to $7.97m, down from $12.01m a year prior. Adjusted net earnings were $15.2m, a 9.8% increase from $13.9m last time.
For the first quarter ended 30 April, Nordstrom reported net sales increased 18.7% to US$3.47bn versus the same period in fiscal 2021, exceeding pre-pandemic sales levels. Digital sales were flat compared with the same period in fiscal 2021 as customers increasingly chose to shop in-store. Digital sales represented 39% of total sales during the quarter. Gross margin of 32.8% increased 190 basis points compared with the same period a year prior due to leverage on buying and occupancy costs and improved merchandise margins from favourable pricing impacts and lower markdown rates. Net earnings amounted to $20m, compared to a loss of $166m a year earlier.
Abercrombie & Fitch Co
Fran Horowitz, CEO of Abercrombie & Fitch, said: “First-quarter net sales exceeded expectations, rising 4% to US$813m, our highest first-quarter level since 2014. Results were driven by ongoing strength at the Abercrombie & Fitch brand, where global sales were above plan.”
For the three months ended 30 April, Hollister brand net sales were down 3% on last year, in line with expectations, to $428.8m, while those at Abercrombie increased 13% to $383.9m. Abercrombie & Fitch reported a net loss of $16.5m, compared to net income of $41.8m a year prior.
Horowitz added the company continued to reduce its promotional activity, contributing to its eighth consecutive quarter of AUR improvement but noted this was more than offset by higher-than-expected freight and product costs.
“Looking forward, we expect higher costs to remain a headwind through at least year-end. We expect freight relief in the fourth quarter as we anniversary increased air usage last year due to the Vietnam shutdown. We will continue to manage expenses tightly and are committed to finding opportunities to offset these costs while protecting strategic investments in marketing, technology and our customer experience, which should drive sustained, long-term sales growth,” she said.
Urban Outfitters reported record total company net sales for the three months ended 30 April of US1.05bn, up 13.4% over the same period last year. The relative proportion of retail segment sales attributable to store and digital channels changed significantly due in large part to the temporary store closures and occupancy restrictions in the United States, Europe and Canada in the prior-year quarter due to the pandemic. With those restrictions not present in the current year quarter, retail segment comparable sales increased due to double-digit growth in retail store sales due to increased store traffic, partially offset by mid-single-digit negative digital channel sales. By brand, comparable retail segment net sales increased 18% at the Anthropologie Group, 15% at the Free People Group and 1% at Urban Outfitters. Nuuly segment net sales increased by $15m driven by a significant increase in the subscriber base. Net income, however fell to $31.5m from $53.5m a year prior, while gross profit rate decreased by 169 basis points on last year.
Kohl’s saw first-quarter net sales and comparable sales decrease 5.2%, while total revenue fell to $3.72bn from $3.89bn a year earlier. Gross margin narrowed to 38.3% from 39%, while net income was flat at $14m.
The company said its board continues to run a robust process to explore all strategic initiatives to maximise value.
Ross Stores CEO Barbara Rentler said the company is disappointed with itd lower-than-expected first-quarter results. “Following a stronger-than-planned start early in the period, sales underperformed over the balance of the quarter. We knew fiscal 2022 would be a difficult year to predict, especially the first half when we were facing last year’s record levels of government stimulus and significant customer pent-up demand as Covid restrictions eased. The external environment has also proven extremely challenging as the Russia-Ukraine conflict has exacerbated inflationary pressures on the consumer not seen in 40 years.” Sales for the 13 weeks ended 30 April, were US$4.3bn versus $4.5bn in the prior-year period. Net earnings declined to $338.4m from $476.5m.
“First quarter operating margin of 10.8% was down from 14.2% in 2021, reflecting the deleveraging effect from the same-store sales decline combined with ongoing headwinds from higher freight and wage costs that began rising in the second half of 2021,” Rentler added.
“Our first-quarter results mark Target’s 20th-consecutive quarter of sales growth, with comp sales growing more than 3% on top of a 23% increase one year ago,” said CEO Brian Cornell. The department store retailer reported total revenue of US$25.2bn for the period, marking a 4% rise compared with last year, reflecting total sales growth of 4% and a 6.7% increase in other revenue. Comparable sales grew 3.3% in the first quarter, reflecting comparable store sales growth of 3.4% and comparable digital sales growth of 3.2%. Net earnings, meanwhile, fell to $1.01bn from $2.1bn a year prior. First-quarter gross margin rate was 25.7%, compared with 30% in 2021. This year’s gross margin rate reflected higher markdown rates, driven largely by inventory impairments and actions taken to address lower-than-expected sales in discretionary categories, as well as costs related to freight, supply chain disruptions, and increased compensation and headcount in distribution centres.
The TJX Companies
Off-price apparel and home fashions retailer The TJX Companies reported net sales of US$11.4bn for the first quarter ended 30 April, an increase of 13% versus the first quarter of fiscal 2022. US comp-store sales growth rounded down to flat over a 17% increase in US open-only comp-store sales in the period. Net income, meanwhile, amounted to $587.5m, up from $533.9m in the prior-year period. Gross profit margin was 27.9%, a 0.2 percentage point decrease versus the first quarter of fiscal 2022.
Walmart has hailed strong top-line growth globally during the first quarter, with total revenue amounting to US$141.6bn in the period, up 2.4%, or 2.6% in constant currency. Growth was negatively affected by $5bn due to divestitures and $0.4bn from currency. Walmart US net sales were $96.9bn, marking an increase of 4% on the prior-year period, while comp sales grew 3% and 9% on a two-year stack. E-commerce growth was 1% or 38% on a two-year stack. Walmart International net sales were $23.8bn, a decrease of $3.5bn, or 13%, with positive comps across all markets. Consolidated net income attributable to Walmart, meanwhile, amounted to $2.05bn, down 24.8% from $2.73bn a year earlier.
Dillard’s reported net sales for the 13 weeks ended 30 April of US$1.61bn, up from $1.33bn in the prior-year period. Net sales includes the operations of the company’s construction business, CDI Contractors, LLC. Total retail sales (which excludes CDI) were $1.58bn, up from $1.3bn last time, while total retail sales increased 22%. Sales in comparable stores for the period increased 23%. Stronger performing categories included men’s apparel and accessories, ladies’ apparel, and juniors’ and children’s apparel. Net income, meanwhile, amounted to $251.1m, up from $158.2m last time. Dillard’s said consolidated gross margin improved significantly to 46.5% of sales compared to 41.7% of sales for the prior year’s first quarter.
Under Armour has reported its results for what it calls its transition quarter ended 31 March. Revenue in the period was up 3% to US$1.3bn (up 4% percent currency neutral) compared to the prior year. Apparel revenue increased 8% to $877m, while footwear revenue decreased 4% to $297m. The sportswear specialist reported a net loss of $59.6m, compared to a net profit of $77.7m in the prior-year period. Adjusted net loss was $3m. Gross margin decreased 350 basis points to 46.5%, driven primarily by elevated freight expenses.
Under Armour also announced it had concluded its 2020 restructuring plan with the recognition of $57m during its transition quarter. Under the $600m plan authorisation, $571m of total charges were recognised.
Global lifestyle apparel company Kontoor Brands said revenue amounted to US$680m for the first quarter ended 2 April, marking a 4% increase on a reported basis, and 5% in constant currency, over the same period in the prior year. Revenue increases were primarily driven by strength in digital, as well as continued positive trends in the US wholesale business and solid performance in international markets. US revenue was $507m, up 4% on last year, while international revenue amounted to $173m, a 6% hike. Wrangler brand global revenue was $412m, a 3% increase over the same period in the prior year on a reported basis and was up 4% in constant currency. Lee brand global revenue was $264m, up 6% on last year on a reported basis and by 7% in constant currency. Net income, meanwhile, was $80.81m, compared to $64.5m a year prior. Gross margin decreased 130 basis points to 44.8% compared to the first quarter of 2021.
Rocky Brands saw net sales increase from 90.5% to US$167m for the first-quarter ended 31 March. First-quarter 2022 net sales include $64m in Boston Group net sales compared with $6.5m in the same period last year. The Boston Group is defined as The Original Muck Boot Company, XTRATUF, Servus, NEOS and Ranger brands acquired from Honeywell International Inc in March of last year. The company net income increased to $7.3m, compared to $4.5m in the first quarter of 2021. Adjusted net income was $8.2m, compared to $8.7m. Gross margin narrowed to 37.6% from 40.1% with the decline mainly attributable to the increase in inbound freight costs coupled with the delayed impact of price increases and a lower mix of retail segment sales compared with the year-ago period, which carry higher gross margins than the wholesale and contract manufacturing segments.
Michael Casey, CEO of kidswear specialist Carter’s, said the company’s first-quarter sales and earnings exceeded its expectations. Net sales decreased US$6.1m, or 0.8%, to $781.3m, reflecting growth in the company’s US wholesale and international segments, offset by lower sales in its US retail segment. Net income fell $18.3m to $67.9m from $86.2m in the first quarter of fiscal 2021. Adjusted net income (a non-GAAP measure) decreased $19.1m to $67.9m.
Edward Rosenfeld, chairman and CEO of Steve Madden, said: “We got off to an outstanding start to the year, delivering the highest quarterly earnings in our history in the first quarter.” For the period ended 31 March, revenue increased 55% to US$559.7m from $361m in the same period of 2021. Net income attributable to Steven Madden, Ltd was $74.5m, compared to $21.2m last time. Adjusted net income was $73.4m, compared to $26.9m, while gross margin increased to 40.7% from 38.5% in the same period of 2021.
Columbia Sportswear Company
Columbia Sportswear Company said net sales increased 22% in the first-quarter ended 31 March to a record US$761.5m, compared to first quarter 2021. The increase primarily reflects strong consumer demand and shipments of higher spring 2022 orders, with growth across all brands, channels and geographies. Net income increased 20% to $66.8m from $55.9m a year earlier, while gross margin contracted 170 basis points to 49.7% of net sales from 51.4% in the comparable period in 2021. Gross margin contraction was primarily driven by higher inbound freight costs, unfavourable year-over-year changes in inventory provisions, unfavourable regional sales mix, and lower wholesale product margins, partially offset by higher direct-to-consumer (DTC) product margins
Footwear firm Skechers USA reported record quarterly sales of US$1.82bn for the first-quarter ended 31 March, marking a year-over-year increase of 26.8%. The rise came as a result of a 28.7% hike in domestic sales and a 25.5% increase in international sales, primarily driven by strength in wholesale sales. Both segments experienced increases, with wholesale increasing 32.7% and direct-to-consumer increasing 15.7%. On a constant currency basis, sales increased 28.7%. Net earnings were $121.2m, compared to $98.57m a year prior, while Gross margin was 45.3%, a decrease of 250 basis points, driven by higher per unit freight costs partially offset by average selling price increases.
Levi Strauss & Co
US denim giant Levi Strauss & Co has hailed its first-quarter 2022 results as exceeding expectations, with reported net revenues of US$1.6bn up 22% on the prior year, but GlobalData analyst Pippa Stephens said growth slowed slightly versus the prior quarter, likely due to the rise in virus cases and heightened economic uncertainty. Click here for the full story.