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October 30, 2020

US Q2 in brief – Boot Barn Holdings, Lands’ End, VF Corp

In the latest second-quarter filings from US apparel and footwear brands and retailers, the impact of the global coronavirus pandemic and widespread store closures can be clearly seen. Despite many retailers swinging to a loss in the period – including G-III Apparel Group and American Eagle Outfitters –  online demand across its brands helped lift comparable sales at specialty clothing retailer Gap Inc, and casual clothing retailer Abercrombie & Fitch bounced back to profit. Elsewhere, VF Corp has seen net income tumble 60% to US$256.7m.

In the latest second-quarter filings from US apparel and footwear brands and retailers, the impact of the global coronavirus pandemic and widespread store closures can be clearly seen. Despite many retailers swinging to a loss in the period – including G-III Apparel Group and American Eagle Outfitters –  online demand across its brands helped lift comparable sales at specialty clothing retailer Gap Inc, and casual clothing retailer Abercrombie & Fitch bounced back to profit. Elsewhere, VF Corp has seen net income tumble 60% to US$256.7m.

Boot Barn Holdings

Boot Barn Holdings has posted a fall in both earnings and revenue for the three months ended 26 September. Net sales decreased 1.4% to US$184.5m from $187.2m last year. Consolidated same-store sales fell 5.1% with retail store same-store sales down 9.1% and e-commerce same-store sales up 17.6%. Net income was $5.8m, compared to net income of $7.7m in the prior-year period. Gross margin declined 160 basis points to 30.1% from 31.7% last time, driven by 110 basis points of deleverage in buying and occupancy costs and a 50-basis point decline in merchandise margin rate. 

Lands’ End

Lands’ End reported a 4.6% rise in net revenue for the second quarter ended 31 July to US$312.1m from $298.3m last year. Global e-commerce net revenue increased 23.6%, driven by US e-commerce increasing 26.2% and international e-commerce growing 9.4% as compared to the prior period. Outfitters net revenue declined 42.8% due to the negative impact of the Covid-19 pandemic. Net income was $4.4m, as compared to net loss of $3m in the second quarter of fiscal 2019, while gross margin increased approximately 10 basis points to 43.4% from 43.3% a year ago. The increase was due to disciplined promotional strategies and continued use of analytics, partially offset by the liquidation of seasonal inventory as retail stores reopened.

VF Corp

Steve Rendle, CEO of VF Corp, said the apparel giant’s year to date results have surpassed internal expectations across all brands, driven by digital and China, two of its key growth pillars. For its second-quarter ended 26 September, revenue decreased 18% to US$2.6bn on the back of store closures and lower consumer demand as a result of the Covid-19 outbreak and related government actions and regulations. Sales were down 19% in constant dollars. International revenue decreased 15%, while sales in Europe were down by 16%. Greater China revenue increased 16%, including an increase of 21% in Mainland China. Direct-to-consumer revenue fell 17%, while digital revenue soared was up 44%. Net income tumbled 60% to $256.7m from $649m in the prior-year period. Gross margin decreased 340 basis points to 50.8%, primarily driven by elevated promotional activity to clear excess inventory and the timing of net foreign currency transaction activity. On an adjusted basis, gross margin decreased 350 basis points to 50.9%.

Assuming no material deterioration to the company’s current business operations, full year fiscal 2021 revenue is expected to be at least $9bn, reflecting a decline of about 14% on an adjusted basis, including low single-digit growth in the second half driven by a return to growth in the fourth quarter. Adjusted earnings per share is expected to be at least $1.20, reflecting a decrease of approximately 55%.

Vince Holding Corp

Vince saw total company net sales tumble by 59.9% to US$37m in the second quarter ended 1 August from $92.2m in the same period last year. At brand level, net sales fell 54.9% to $32.2m at Vince and by 76.9% to $4.8m at Rebecca Taylor and Parker. Gross margin rate was 36% compared to 47% a year prior. The decline was primarily due to increased promotional activity, year-over-year adjustments to inventory reserves, channel mix, and deleveraging of supply chain costs partially offset by lower sales allowances. Net loss, meanwhile, narrowed to $15.1m from $19.5m in the same period last year. Excluding non-cash asset impairment charges, net income in the second quarter of fiscal 2019 was $590,000.

The Buckle

Nebraska-based denim specialist The Buckle has reported net income of US$34.7m for the second quarter ended 1 August, compared to $16.4m in the prior-year period. Net sales for the 13-week period increased 6% to $216m from net sales of $203.8m a year ago. Online sales surged 99% to $46m from $23.1m last year. 


Zumiez’s total net sales for the second quarter ended 1 August increased 9.6% to US$250.4m from $228.4m last year. For the stores that were open, comparable sales for the 13 weeks were up 37.3% compared to the same period a year ago.  Net income, meanwhile, was $25.4m, compared to net income of $9m in the prior-year period.

The company said total third quarter-to-date sales for the 37 days ending 7 September were down approximately 14% compared last year. Total comparable sales were down 5.1%. By channel, open store comparable sales decreased 10.7% and e-commerce sales increased 27.4%.

G-III Apparel Group

G-III Apparel Group has swung to a net loss of US$15m for the second quarter from net income of $11.1m in the same period last year. Included in the company’s net loss for the quarter are net losses from the Wilsons Leather and GH Bass operations of $25.6m, compared to $6.3m in the prior year’s comparable period. Net sales for the three months ended 31 July, meanwhile, tumbled 53.8% to $297.2m from $643.9m last year. The company is restructuring its retail operations segment, which includes permanently closing 110 Wilsons Leather and 89 GH Bass stores. Net sales for the second quarter for the Wilsons Leather and GH Bass portion of G-III Apparel’s retail operations segment were $19.7m, compared to $53.6m in the same period last year.

CEO Morris Goldfarb said the closure of Wilsons Leather and GH Bass stores is expected to be completed by the end of this fiscal year and will result in the elimination of significant operating losses. He added the firm has reset is order book for the balance of the year and shifted its product assortment to athleisure, jeans, casual sportswear and coats. The company expects net sales to decline in the range of 28% to 33% in the second half of its fiscal year compared to the same period last year. 

American Eagle Outfitters

Jay Schottenstein, CEO of American Eagle Outfitters, Inc (AEO), said the company delivered a significant improvement from the first quarter for the 13 weeks ended 1 August. Total net revenue for the period decreased US$157m, or 15% to $884m from $1.04bn in the prior-year quarter. The decline to last year largely reflected store closures during the second quarter. Revenue in the year-ago period also included $40m from Japanese license royalties. By brand, American Eagle revenue decreased 26%, following a 1% decline last year. Aerie’s revenue increased 32%, following a 22% increase last year. Digital demand, as measured by ordered sales, increased by 48%. Aerie digital demand rose 113% and AE increased 21%. AEO’s digital reported revenue surged 74%, rising 142% at Aerie and 47% at AE. Net loss, meanwhile, amounted to $13.8m, compared to net income of $65m a year earlier. Gross margin narrowed to 30% from 36.7% last time.

Tilly’s, Inc

Tilly’s has reported total net sales of US$135.8m for the second quarter ended 1 August,  a decrease of $25.9m or 16% compared to $161.7m last year. Net sales from physical stores for the period were $83.9m, a decline of $55.1m or 39.6% from $138.9m for the second quarter of fiscal 2019. Net sales from stores represented 61.7% of total net sales for the quarter compared to 85.9% of total net sales last year. Net sales from e-commerce, meanwhile, amounted to $52m, an increase of $29.2m or 127.8% compared to $22.8m a year earlier. E-commerce net sales represented 38.3% of total net sales for the quarter compared to 14.1% last year. Net income, meanwhile, fell to $5.3m from $9.3m, while gross margin narrowed to 30.7% from 32% in the prior-year period.

Looking ahead, CEO Ed Thomas said the third quarter has been been significantly impacted by the delay in back-to-school dates thus far.

J.Jill Inc

Women’s wear retailer J.Jill Inc saw its second quarter sales halve, but net losses narrowed on comparisons with the prior year which was hit by impairment charges. For the three months to 1 August, total net sales fell 49% to $92.6m from $180.7m, with direct to consumer sales rising to 71.6% of the total, compared with 42.6% a year ago. Net loss fell to $18.5m from a loss of $96.7m in the year-ago period – which included $97.5m in impairment charges. Gross margin rose to 59.4% from 58.3%, reflecting markdowns to clear inventory last year. The retailer, which is in talks to avoid bankruptcy, has agreed on the principal terms of a financial restructuring with more than 70.0% of its lenders.

Macy’s Inc

Macy’s said its performance for the quarter was stronger than anticipated across all three brands: Macy’s, Bloomingdale’s and Bluemercury, driven largely by the sales recovery of its stores. Net sales amounted to US$3.56bn from $5.55bn a year earlier, while comparable sales were down 34.7% on an owned basis and down 35.1% on an owned plus licensed basis. Digital sales, however, remained strong, growing 53%. The retailer delivered gross margin of 23.6%, an improvement of approximately 650 basis points from the first quarter due to improved retail margins from mix and better sell through of clearance merchandise. Losses amounted to $431m from earnings of $86m a year earlier.

PVH Corp

PVH Corp said its second quarter results exceeded company expectations, despite continued disruption from the Covid-19 pandemic. Revenues were down 33% to US$1.58bn, which represented an improvement compared to the percentage revenue drop for the quarter prior. Sales through PVH’s digital channels grew over 50%, with sales through its directly operated digital commerce businesses up 87%. Sales were down in the company’s Tommy Hilfiger, Calvin Klein, and Heritage Brands divisions, by 28%, 32%, and 51%, respectively. Net losses amounted to $51.4m from earnings of $193.5m a year earlier.


Despite a 42% fall in revenues in the second quarter, Guess said it minimised its losses and remained focused on managing what was in its control including reducing costs and optimising inventory management. The company recorded a GAAP net loss of US$20.4m, compared to GAAP net earnings of $25.3m a year earlier. Adjusted operating margin decreased 720 basis points to negative 0.2%. Total net revenue, meanwhile, was down 41.7% to $398.5m. Declines were recorded in the company’s Americas retail, Europe, and Asia divisions, of 44.7%, 39.5%, and 39.7%, respectively.


Caleres delivered sequential improvement in several key financial metrics, spurred by the restart of its retail store fleet, ongoing strength in e-commerce sales and prudent management of expenses and working capital. Net sales in the quarter were $501.4m, down 33.4% from the second quarter of fiscal 2019. Total company e-commerce sales, however, were up more than 30%, with total company e-commerce penetration rising to nearly 34% of net sales. Net losses amounted to $30.7m, compared to a net income of $25.3m a year earlier.

Shoe Carnival

Shoe Carnival reported lower earnings in its second-quarter but record net sales of US$300.8m, exceeding a previous record set in the third quarter of 2017 by 4.6%. Comparable store sales were up 12.6%, while e-commerce sales soared 332%, representing more than 20% of total sales. Earnings, meanwhile, were lower at $10.1m versus $11.8m a year earlier. Gross profit margin narrowed to 27.5% from 30.6% in the year ago quarter.

Gap Inc

Online demand across its brands helped lift comparable sales at specialty clothing retailer Gap Inc by 13% during the second quarter. However, while online net sales increased 95% year-over-year in the three months to 1 August, this wasn’t enough to offset Covid-19 related store closures, which pushed net sales down 18% to $3.28bn. The San Francisco based company also swung to a second-quarter net loss of $62m, from a profit of $168m a year earlier. By brand Old Navy net sales were down 5% while comparable sales were up 24%; Gap net sales were down 28% while comparable sales were up 12%; Banana Republic net sales were down 52% and comparable sales were down 27%; and Athleta net sales were up 6% with comparable sales up 19%. Gross margin fell 3.8 percentage points to 35.1% due to increased shipping costs as online sales grew.

Abercrombie & Fitch

Casual clothing retailer Abercrombie & Fitch bounced back to profit in its second-quarter, boosted by a jump in online sales, tight control of costs, and lower promotional and clearance activity. The company, whose brands include Abercrombie and Hollister, booked net income of US$5.5m in the three months to 1 August, from a loss of $31.1m a year ago, while gross margin improved 140 basis points to 60.7%. While net sales slipped 17% to $698m as Covid-19 hit closures hit store sales, online sales jumped 56% to $386m. The better than average result has been helped by A&F’s focus on relaxed casual clothing, which resonated strongly with consumers during the pandemic.

Express Inc

Fashion apparel retailer Express said consolidated net sales decreased 48% for the 13 weeks ended 1 August to US$245.7m from $472.7m last year, with consolidated comparable sales down 24%. Comparable retail sales, which include both Express stores and e-commerce, decreased 28% compared to the second quarter of 2019. Comparable outlet sales were down 15%. Gross margin was -17.9% of net sales compared to 26.8% in last year’s second quarter. The decrease was driven by the sales impact of Covid-19, the liquidation of spring inventory that accumulated as a result of store closures, and a $6.8m non-cash impairment charge taken against certain long-lived store assets. Net loss, meanwhile, amounted to $107.8m, compared to a net loss of $9.7m in the second quarter of 2019. On an adjusted basis, net loss was $95.6m, compared to $7.2m a year ago.

Dick’s Sporting Goods 

CEO of Dick’s Sporting Goods Edward Stack said the company had an exceptionally strong second-quarter in which it delivered its highest quarterly sales and earnings. The firm reported consolidated net income for the second quarter ended 1 August of US$276.8m, compared to $112.5m in th prior-year period. On a non-GAAP basis, consolidated net income was $281.7m. Net sales, meanwhile, increased 20.1% to about $2.71bn. Consolidated same store sales were up 20.7%, while e-commerce sales increased 194%, including Curbside Contactless Pickup. E-commerce penetration for the second quarter of 2020 was approximately 30% of total net sales, compared to approximately 12% last year. 

Chico’s FAS

Chico’s FAS reported a net loss of US$46.8m for the 13 weeks ended 1 August, compared to a net loss of $2.3m last year. Net sales were $306.2m, an improvement of 9.2% from the first quarter, reflecting the benefit of strong digital sales and store reopenings. Sales decreased approximately 39.8% from last year’s second quarter, reflecting disruptions related to the pandemic, including the continuation of temporary store closures and limited hours during the second quarter, as well as the impact of 74 net permanent store closures since the prior-year period, partially offset by double-digit growth in digital performance. Gross margin was 14.6%, up more than 1,800 basis points from the first quarter. Gross margin in last year’s second quarter was 33.2%. The second quarter year-over-year decrease in gross margin primarily reflects the impact of temporary store closures, which resulted in deleverage of occupancy costs as a percent of net sales as well as a pre-tax inventory write-off of $12.3m, or 4% of net sales. 

Urban Outfitters, Inc

Urban Outfitters has reported a 43% drop in second-quarter net income to US$34.4m from $60.3m for the three months ended 31 July. Gross profit rate decreased to 29.6% from 32.8% in the prior year’s comparable period, primarily due to an increase in delivery and logistics expense due to penetration of the digital channel, followed by store occupancy expense rate deleverage. Total company net sales, meanwhile, decreased 16.5% over the same period last year to $803m. Comparable retail segment net sales decreased 13%, driven by negative retail store sales due to stores being closed for part of the quarter and lower store productivity once opened, partially offset by strong double-digit growth in the digital channel. By brand, comparable retail segment net sales were up 11% at Free People, down 8% at Urban Outfitters, and 25% at the Anthropologie Group. Total retail segment net sales fell 14%, while wholesale segment net sales decreased 51%.


Nordstrom said for the second quarter ended 1 August, sales were in-line with the company’s expectations. Net sales decreased 53% to US$1.78bn from $3.78bn last year, reflecting temporary store closures for about half of the quarter due to Covid-19 in addition to an approximately 10-percentage point timing impact from the Nordstrom Anniversary Sale shifting from the second quarter to the third quarter. In full-price, net sales decreased 58%. Excluding the Anniversary Sale event shift impact, full-price sales decreased in the mid-forties percent range. Off-price net sales were down 43% compared with the same period in fiscal 2019. Total company digital sales fell 5%. Excluding the Anniversary Sale event shift impact, digital sales increased approximately 20% in the second quarter. Net loss, meanwhile, amounted to $255m, which included after-tax Covid-19 related charges of $14m. This compared to net earnings of $141m during the same period in fiscal 2019. Gross margin narrrowed to 21% from 35% last year due to planned markdowns and deleverage from lower sales volume and reflected sequential improvement in merchandise margin trends.

The Children’s Place

The Children’s Place said net sales decreased 12.3% to US$368.9m in the three months ended 1 August from $420.5m a year earlier, primarily as a result of the impact of temporary store closures, along with a decrease in back-to-school sales beginning in mid-July, partially offset by increased digital sales which surged 118%. The company swung to a net loss of $46.6m from net income of $1.5m last year. Adjusted net loss was $21.7m, compared to adjusted net income of $3m in the comparable period last year. Adjusted gross margin deleveraged 760 basis points to 25.4%, primarily as a result of higher fulfillment costs related to meaningfully higher levels of ship-from-store activity related to strong digital demand.

CEO Jane Elfers said: “Due to the large majority of schools adopting remote or hybrid learning models for the start of the school year, our back to school sales have been significantly impacted and we anticipate a meaningful negative impact on our Q3 results.”

The Cato Corporation 

Cato Corp has reported net loss of US$7.2m for the second quarter ended 1 August, compared to net income of $11.9m in the prior-year period. Sales for the quarter were $166.3m, or a decrease of 21% from sales of $210.4m a year ago. The company’s same-store sales decreased 24% to the same period last year. Gross margin, meanwhile, decreased to 20.2% from 38%, due to a reduction in merchandise contribution, combined with the effects of deleveraging from the sales decline related to the phased reopening of stores and limited operating hours. 

“Sales softened through the quarter and into early August.  As we see this trend continuing, we are cautious about the second half of the year,” said CEO John Cato.

Foot Locker

Foot Locker has posted net income of US$45m for the second quarter ended 1 August, compared to $60m in the corresponding prior-year period. Excluding pre-tax charges, non-GAAP net income was $75m. Total second quarter sales increased by 17.1% to $2.08bn from $1.77bn last year. Excluding the effect of foreign exchange rate fluctuations, total sales for the second quarter of 2020 increased 17.3%. Second-quarter comparable-store sales were up 18.6%. The company’s gross margin rate decreased to 25.9% from 30.1% a year ago.

Ross Stores

Discount department store retailer Ross Stores has reported net income of US$22m for the 13 weeks to 1 August, compared to net income of $413m last year. Total sales for the period were $2.7bn, down 32.5% from $4bn in the second quarter of 2019. Comparable store sales were down 12% for reopened stores from the date of their reopening to the end of the fiscal quarter. Second-quarter 2020 results include a $174m benefit related to the partial reversal of the inventory valuation reserve from the first quarter. CEO Barbara Rentler said comparable stores sales during the quarter were impacted by a number of factors. “During the initial re-openings, sales were ahead of our conservative plans as we benefitted from pent-up demand and aggressive markdowns to clear aged inventory. In the weeks thereafter, trends were negatively impacted from depleted store inventory levels while we were ramping up our buying and distribution capabilities.”

She added: “As we move into the third quarter, trends have not materially changed from the second quarter with comparable store sales for the first two and a half weeks trending down mid-teens versus last year.

L Brands

Victoria’s Secret and Pink owner L Brands has booked a US$49.6m net loss for the second quarter versus a $37.6m profit against the same period last year, on higher impairment charges and store closures related to the coronavirus outbreak. Net sales for the period ending 1 August were 20% lower year-on-year at US$2.3bn. Specifically, Victoria’s Secret sales in the period were 39% lower year-on-year at $977.5m. Conversely, sales at Bath & Body Works were 13% higher at $1.2bn. 

L Brands has been weighing up options for a separation of the two businesses. Earlier this year, a planned takeover of Victoria’s Secret by Sycamore Partners was shelved. L Brands said it remained commited to establishing Bath & Body Works as a pure-play public company and said it is taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and Pink businesses (collectively, Victoria’s Secret) to operate as a separate, standalone company.  

TJX Companies

The TJX Companies CEO Ernie Herrman said the firm’s top and bottom lines well exceeded internal plans during the second quarter ended 1 August. The off-price apparel and home fashions retailer reported second-quarter net sales of US$6.7bn, down from $9.8bn last year. Overall, open-only comp store sales were down 3% versus last year. The company posted a net loss of $214m, compared to net income of $759m in the prior-year period.

Target Corp

Department store retailer Target Corp said total revenue of US$23bn grew 24.7% compared with last year, reflecting sales growth of 24.8% and a 16.6% increase in other revenue. The company’s total comparable sales grew 24.3% in the second quarter, the strongest it has ever reported, reflecting comparable stores sales growth of 10.9% and digital sales growth of 195%. Net earnings, meanwhile, amounted to $1.7bn, compared to $938m in the prior-year period. Second-quarter gross margin rate expanded to 30.9% from 30.6% in 2019. Target said the increase reflected sales strength across its entire multi-category assortment and lower discounts driven by high sell through rates. The company reported “unusually strong” market-share gains across all five of its core merchandise categories in the period. 


US department store retailer Kohl’s has posted a second-quarter net sales decrease of 22.9% for the three months to 1 August. Total revenue fell 23.1% to US$3.4bn from $4.4bn in the prior-year period, while net income tumbled 80% to $47m from $241m last year. Gross margin, meanwhile, narrowed 569 basis points to 33.1% from 38.8%. On a non-GAAP basis, Kohl’s reported an adjusted net loss of $39m, compared to adjusted net income of $247m a year ago. 


US retail giant Walmart has reported an increase of US$7.4bn, or 5.6%, in total revenue to US$137.7bn for the second quarter. Excluding currency, total revenue would have increased by 7.5% to reach $140.2bn. Walmart US posted a 9.5% rise in net sales to $93.3bn, while US comp sales increased 9.3% in the quarter. Walmart US e-commerce sales grew 97% with strong results across all channels. Net sales at Walmart International, meanwhile, were $27.2bn, a decrease of 6.8%. Changes in currency rates negatively affected net sales by approximately $2.4bn. Consolidated net income attributable to Walmart increased 79.4% on last year to $6.5bn from $3.6bn. Consolidated gross profit rate increased 63 basis points primarily as a result of a shift in the mix of sales to higher-margin general merchandise categories, fewer markdowns and better margins on fuel, partially offset by the carryover of investments in price from last year.

Sequential Brands Group 

Brand management company Sequential Brands Group, Inc has posted a 14.4% decline in total revenue from continuing operations for the second quarter ended 30 June to US$22.6m from $26.4m in the prior year quarter. On a GAAP basis, loss from continuing operations was $2.9m, compared to $3.3m last year. Non-GAAP net loss amounted to $1.8m, compared to $2.6m last time. Net loss attributable to Sequential Brands Group narrowed to $2.8m from $4.6m. 


Dillard’s has narrowed its net loss to US$8.6m for the 13 weeks to 1 August from $40.7m in the prior year second quarter. The company said it expects to be in a net operating loss position for the fiscal year and said included in net loss for the current quarter is a net tax benefit related to the CARES Act. Net sales, meanwhile, totalled $919m, down from $1.4bn a year prior. Net sales includes the operations of Dillard’s construction business, CDI Contractors, LLC. Total retail sales, which exclude CDI, decreased by about 35% to $893.2m. The company did not report comparable store sales data for the quarter due to the temporary closure of its brick-and-mortar stores as well as the interdependence between in-store and online sales. While no indication of future performance, it added sales performance in the stores since reopening through 1 August was approximately 72% of prior year sales on corresponding days. Retail gross margin improved 239 basis points to 31.1% from 28.7% last year, primarily due to decreased markdowns. Consolidated gross margin, meanwhile, improved 271 basis points.

Iconix Brand Group

For the second quarter ended 30 June, Iconix Brand Group posted total revenue of US$22.3m, a 35% decline, compared to $34.4m in the prior-year period. Revenue across all segments was primarily negatively impacted by the effects of the Covid-19 pandemic on the global economy. Iconix attributed a 46% decrease in revenue in its women’s segment principally to a decrease in licensing revenue from its Mudd and Candies brands. Revenue from the men’s segment decreased 55% mainly due to a decrease in licensing revenue from the Buffalo and Umbro brands. International segment revenue declined 27% in the current quarter mainly due to decreases in Latin America and Europe. GAAP net income attributable to Iconix reflected a loss of $17.4m, compared to net income of $1.3m for the second quarter of 2019.

Kontoor Brands

Kontoor Brands, the owner of iconic denim brands Wrangler and Lee, saw sales in its second-quarter slump 43% to US$349m as it recorded declines in both its domestic and international markets. The company said Covid-19 related wholesale and owned door closures and stay-at-home orders were to blame, as well as an approximate $33m timing shift of shipments from the second quarter to the third. Kontoor moved to a net loss of $33.3m from earnings of $38m a year earlier, while gross margin was down 10 basis points to 38.5%.

Wolverine Worldwide

Wolverine Worldwide CEO Blake Krueger said the company’s second-quarter results were much stronger than expected, despite the negative impact of unprecedented global market conditions and significant retail store closures for much of the time period. For the three months ended 27 June, reported revenue was US$349.1m, down 38.6% from $568.6m a year ago. On a constant currency basis, revenue was down 38.3%, while owned e-commerce sales soared 96% on the previous year. Reported gross margin narrowed to 42.2% from 40.5%. The company reported a net loss of $1.9m, compared to net income of $40.2m in the prior-year period. 

“We believe the company is positioned well to accelerate out of the current market downturn once the impact of the pandemic subsides,” Krueger added. 

Boot Barn Holdings

Boot Barn Holdings posted a 20.5% decline in net sales for the three months to 27 June to US$147.8m from $185.8m in the prior-year period. Consolidated same store sales decreased 14.9% with retail store same store sales down 27.1% and e-commerce same store sales up 51.9%. Net loss was $0.5m, compared to net income of $9.7m in the prior-year period. Gross margin narrowed to 27.2% from 33.5% a yea prior. The 630 basis points decline was driven by 430 basis points of deleverage in buying and occupancy costs and a 200-basis point decline in merchandise margin rate. 

Weyco Group

Footwear maker Weyco has reported a net loss of US$8.9m for the second quarter ended 30 June, compared to net earnings of $1.5m last year. Net sales for the period were $16.7m, down as compared to second quarter 2019 net sales of $60.5m. Net sales across all of the company’s brands were down significantly in all major categories as a result of retail shutdowns due to the pandemic. 

“Cost management and liquidity remain top priorities of the company during this challenging time,” said Thomas Florsheim Jr, chairman and CEO. “We are taking measures to right-size our cost structure in light of decreased demand.”

Express Inc

Express Inc is expecting a drop of 24% in total comparable sales in the second quarter after the pandemic peaked in several US states during the three month period. The retailer experienced prolonged closures in New York and the re-closing of a number of stores in California. Store sales and traffic, however, appear to have stabilised in July, with total comparable sales, including e-commerce, at approximately negative 20% for the month. This is driven by the second consecutive month of positive demand for its e-commerce business in July, where demand has accelerated from negative 35% in early May to positive 25% for the back half of July. Net sales for the quarter are estimated to be down 48% year-on-year.

Under Armour

CEO of Under Armour Patrik Frisk said while the US sportswear brand performed better than expected during the second quarter, it still experienced a significant decline in revenue across all markets. Revenue was down 41% in the three months to 30 June to $708m. Wholesale revenue decreased 58% to $299m, while direct-to-consumer revenue was down 13% to $368m. North America sales fell by 45% to $450m, while revenue from the international business decreased 34% to $224m. Within the international business, revenue dropped 39% in EMEA, by 20% in Asia-Pacific, and by 72% in Latin America. By segment, apparel revenue tumbled 42% to $426m, footwear sales were down by 35% to $185m, and accessories revenue declined 47% to $56m. Net loss, meanwhile, was $183m, compared to $17.4m in the prior-year period. Adjusted net loss was $141m. Gross margin increased 280 basis points to 49.3%, driven by channel mix which benefitted from significantly lower sales to the off-price channel, as well as a higher mix of direct-to-consumer sales, partially offset by the negative impacts from Covid-19 related discounting.

Frisk noted Under Armour is encouraged by some of the momentum  experienced in June and July but remains appropriately cautious with respect to the balance of 2020.

Columbia Sportswear

Columbia Sportswear has reported a net loss of US$50.7m for the second quarter ended 30 June, compared to net income of $23m for the comparable period in 2019. Net sales tumbled 40% to $316.6m from $526.2m a year ago, while gross margin contracted 200 basis points to 46.2% from 48.2% last time. CEO Tim Boyle said second quarter sales and profitability declines clearly reflect the global effects of the ongoing Covid-19 pandemic but highlighted the firm’s e-commerce growth, which increased 72% year-over-year.

Although uncertainty remains unprecedented, Columbia said it expects sales volume to stay below prior year levels for the balance of the year. Absent further deterioration in trends due to the ongoing pandemic, the second quarter is expected to be the steepest year-over-year quarterly percent decline in net sales of the year.


US apparel manufacturer HanesBrands has reported net sales of US$1.74bn for the second quarter ended 27 June, compared with $1.76bn a year ago. The year-ago quarter included net sales of $119m from the now exited C9 Champion mass programme and the DKNY intimate apparel license. Excluding the exited programmes and foreign exchange rates, total constant-currency net sales for second-quarter 2020 increased 7%. Apparel sales and protective garment sales both exceeded the company’s base-case scenario for the quarter, with Hanes selling $752m in protective garments globally. On a rebased comparison to a year ago, second-quarter global online sales, meanwhile, increased more than 70% through company e-commerce websites, retailer websites, large internet pure-plays, and business-to-business customers. Excluding sales of protective garments, approximately 30% of total sales in the quarter were through the online channel. Net income in the period increased 7.8% to $161.2m from $149.6m a year ago. 

Absent a slowdown of store reopenings or recurrence of store closures, Hanes anticipates sequential improvement of sales declines in the third and fourth quarters. In addition, excluding the potential for additional government contracts, it estimates that it could sell more than $150m of protective garments in the second half of 2020. 

Crocs, Inc

CEO Andrew Rees said the footwear firm delivered exceptional performance in its Americas and e-commerce businesses and increased profit despite a very challenging environment in the second quarter. Global revenues were US$331.5m for the period to 30 June, declining 7.6% from the second quarter of 2019, or 6% on a constant currency basis. Four out of five of its key geographies delivered revenue growth – United States, Korea, China, and Germany. Global e-commerce revenue increased by 67.7% with strong growth in all regions, while wholesale revenue declined 19.5% and retail revenue declined 41.8% due to Covid-19 related store closures. Retail comparable store sales on a constant currency basis grew 10.5% upon re-opening. Net income in the quarter, meanwhile, increased by more than 44% to $56.6m from $39.2m last year. Gross margin was 54.3%, an increase of 150 basis points from last year’s second quarter. Adjusted gross margin was 55.2%, which excludes $3.2m or 100 basis points of non-recurring expenditures for Covid-19-related inventory charges in Asia and costs related to Crocs’ US distribution centre. 

Steve Madden

Steve Madden has posted a 68.2% tumble in revenue to US$142.8m for the second quarter ended 30 June, compared to $449.6m in the same period of 2019. Revenue for the wholesale business decreased 72.5% to $100m, including a 72.8% decline in wholesale footwear and a 71.5% decline in wholesale accessories/apparel. Retail revenue was down 49.2% to $41.4m due to the closure of the vast majority of the company’s stores for most or all of the quarter, partially offset by 88% revenue growth on in the second quarter. Net loss attributable to the firm amounted to $16.6m, compared to net income of $36.6m in the prior year’s second quarter. Adjusted net loss was $14.7m, compared to adjusted net income of $39.5m last time. Gross margin was 39.1% compared to 37.8% in the same period last year.

Rocky Brands, Inc

Rocky Brands said net sales for the second quarter ended 30 June declined 9.3% to US$56.2m, compared to $62m in the prior-year period. Net income fell to $2.4m from $3.2m last year. Adjusted net income, which excludes expenses related to the temporary closure of the company’s manufacturing facilities due to Covid-19, was $3.2m. Gross margin, meanwhile, was flat at 34.6%, while adjusted gross margin was 36.4%. The 180 basis point increase was driven primarily by a higher percentage of retail sales, which carry higher gross margins than wholesale and military sales, and higher retail margins year over year, partially offset by lower wholesale and military margins compared to 2019.

CEO Jason Brooks said: “As lockdown restrictions began to ease in many areas of the country midway through the second quarter, we experienced a significant pick up in weekly sell-through at retail. Given the circumstances, we are pleased with our recent performance and encouraged as this momentum has carried into July.”

Carter’s, Inc

Carter’s has posted net income of US$8.2m for the second quarter ended 27 June, compared to $43.9m in the second quarter of fiscal 2019. Adjusted net income was $23.6m, compared to $43.4m a year ago. Net sales, meanwhile, fell $219.5m, or 29.9%, to $514.9m, driven by the closure of the company’s stores and decreased sales to certain wholesale customers as a result of disruptions related to Covid-19. The decline was partially offset by strong e-commerce channel growth. Comparable e-commerce sales in the US and Canada grew 101% and 194%, respectively. CEO Michael Casey said the firm had a strong finish to the second quarter. “Thankfully, the disruption to our business due to the pandemic and related store closures was less meaningful than we expected,” he added. 

Skechers USA

Footwear retailer Skechers USA saw second quarter sales tumble 42% to US$729.5m as markets around the world closed – with international business down 37.8% and domestic sales dropping 47.3%. Its international sales declines were partially offset by an 11.5% increase in China sales. It also registered a 428.2% surge in company-owned e-commerce sales. For the three months to 3 June, the Manhattan Beach, California-based business posted a net loss of $68.1m versus profits of $75.2m a year earlier. “Despite the challenges of the second quarter, we are optimistic about the early-stage recovery we are seeing in much of our business, including a return to growth in China and the explosive growth of our e-commerce channel,” said CFO John Vandemore.

Levi Strauss & Co

Jeans giant Levi Strauss & Co recorded a net loss for the second quarter ended 24 May of US$363.5m. The figure reflects $242m in pre-tax restructuring charges and inventory costs and other charges recorded in connection with Covid-19 business disruptions. It compares to net income of $28.2m a year ago. Adjusted net loss was $192m, compared to an adjusted net income of $69m last year. Gross margin narrowed 19.2 percentage points to 34% from 53% in the same quarter of the prior year. Net revenues of $497.5m tumbled 62% on a reported basis and 61% on a constant-currency basis, excluding $41m in unfavourable currency effects. This was down from $1.31bn last time. The decline was due to the approximate ten-week closure of the substantial majority of the company’s and its franchise and wholesale customers’ retail locations in the Americas and Europe, as well as in most of Asia outside greater China and Korea as a result of the Covid-19 pandemic. By the end of May, only a portion of these doors had reopened. The decrease was partially offset by the company’s e-commerce business which grew 25% for the quarter, with sequential month-over-month acceleration to nearly 80% growth for the month of May. In Europe, net revenues dropped 68% on a reported basis to $129m, while in the Americas, net revenues were down 59% to $283m. In Asia, net revenues fell 61% to $86m.

Meanwhile, Levi Strauss CEO Chip Bergh has outlined plans to slash the company’s non-retail, non-manufacturing workforce by about 700 positions, or roughly 15%. The move is expected to generate annualised savings of $100m.

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