Caleres says it is expecting record annual sales and adjusted earnings per share for the full year (fiscal 2022).
The earnings guidance increase comes after it says it has seen stronger-than-anticipated holiday performance and continued robust demand for its lead brands.
On a preliminary basis, Caleres now expects the following for fiscal year 2022: Consolidated sales of approximately $2.97bn, up 7% compared to fiscal year 2021, versus previous expectations for growth of 4-6%. Earnings per diluted share of $4.86 to $4.92 and adjusted earnings per diluted share between $4.50 and $4.52, versus previous expectations for adjusted earnings per share between $4.30 to $4.40; and consolidated inventory down approximately 3% compared to fiscal year 2021, versus previous expectation for an increase of mid-single digit percent.
“Looking ahead, we believe the strength of our brands combined with the structural changes we’ve made in recent years have increased the annual earnings baseline of the company to in excess of $4.00 per share,” said Jay Schmidt, president and chief executive officer. “We look forward to discussing our 2022 results and providing a detailed outlook for 2023 on our fourth-quarter earnings call in mid-March.”
Under Armour reported a ‘solid’ financial performance for the third quarter ended 31 December with revenue up 3% to US$1.6bn in comparison to the previous year.
However, gross margin dropped 650 basis points to 44.2%, driven primarily by higher promotions, mix impacts related to increased distributor and footwear revenue, and the adverse effects of changes in foreign currency. Earnings climbed to $121.6m from $109.6m a year earlier. Q3 saw apparel and accessories revenues lower by 2.1% to US$1.07bn and 1.7% to US$105m respectively, whereas, revenue for footwear increased 25.4% to US$354m.
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Under Armour interim president and CEO Colin Browne was pleased with the brand’s performance and said Under Armour was on track to achieve its full-year operational and financial goals. He added: “Moving forward, I’m excited to partner with Stephanie Linnartz to advance our strategic consumer and product refinements further – leveraging Under Armour’s strong brand to drive sustainable, profitable growth.”
Deckers Brands has booked a 13.3% increase in Q3 revenues to US$1.3bn. Wholesale net sales increased 8% while direct-to-consumer sales rose 18.7%. Operating income was $362.7 million compared to $293.4m. Net income rose to $278.7m versus $232.9m.
“Our brands delivered another stellar quarter, led by record results for both Hoka as well as our consolidated direct-to-consumer business,” said Dave Powers, president and CEO. “The consistent strength of Deckers results thus far in fiscal year 2023, despite macroeconomic and currency headwinds, are the result of our brand marketplace management actions and dedication to long-term strategic priorities. We believe Ugg and Hoka are two of the healthiest, well-positioned brands in their respective markets, and with the strength of our operating model, Deckers is poised for continued success going forward.”
In its holiday sales report, Nordstrom announced a net sales decrease of 3.5% for the nine-week holiday period ended 31 December 2022, compared with the nine weeks ended 1 January 2022.
“The holiday season was highly promotional, and sales were softer than pre-pandemic levels. While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc. “Still, our team executed well, and we enter 2023 in a stronger position as we prioritised starting the new fiscal year with clean inventory levels, even if this required more markdowns than planned.”
The company took additional markdowns in order to finish the year in a healthy and current inventory position. The company expects year-end inventory levels to be down by a double-digit percentage compared with last year, and roughly at 2019 levels. Based on holiday results, Nordstrom has updated its fiscal 2022 outlook and expects revenue growth at the low-end of its previously issued outlook of 5 to 7% and earnings before interest and taxes (“EBIT”) margin, as a percent of sales, of 2.8 to 3.1 percent, compared with its prior outlook of 4.1 to 4.4%.
In its preliminary results for the first quarter (Q1) ended December 31, 2022, Delta Apparel expects net sales of US$106m benefiting from 17% sales growth in the Salt Life Group segment, including double-digit growth across its direct-to-consumer retail and eCommerce channels combined with continued growth in its wholesale customer base.
The Delta Group segment was led by 20% growth at DTG2Go over the prior year first quarter. Although the Company did experience an anticipated sales decline in its Delta Direct channel due to market conditions, its Global Brands and Retail Direct channels both achieved double-digit sales growth for the quarter.
Robert W. Humphreys, the CEO, commented, “The top-line performance we delivered this quarter showcases the inherent resiliency of our business model and the strength we saw in the majority of our sales channels allowed us to overcome some demand-related headwinds in the mass retail channel.”
Urban Outfitters has reported total company net sales (holiday sales) for the two months ending 31 December increased 2.3%. Total Retail segment net sales increased 1%, with comparable Retail segment net sales increasing 2%, partially offset by a 1% negative impact of foreign currency translation. The increase in Retail segment comparable net sales was driven by low single-digit positive growth in digital channel sales and low single-digit positive growth in retail store sales. By brand, comparable Retail segment net sales increased 15% at the Free People Group and 7% at the Anthropologie Group and decreased 10% at Urban Outfitters. Wholesale segment net sales decreased 22% driven by a decrease in Free People wholesale sales primarily due to a decrease in sales to department stores. Nuuly segment sales increased 150% due to a 153% increase in our subscribers during the two months ended December 31, 2022, as compared to the prior year period.
Tilly’s Inc announced net sales results for the nine-week period ended December 31, 2022 (the “2022 holiday period”) and said total net sales fell 12.9% to $150.9m on a year-on-year basis. Total comparable net sales, including both physical stores and e-commerce, decreased by 14.4% for the 2022 holiday period. Total comparable net sales increased by 0.2%. Comparable net sales in physical stores decreased by 15.3% for the 2022 holiday period. E-commerce net sales decreased by 12.8% for the 2022 holiday period compared to a decrease of 5.7% during the 2021 holiday period.
“We believe this year’s inflationary environment negatively impacted our customers’ spending and our results during the 2022 holiday period, particularly when compared to 2021’s post-pandemic record-setting holiday period,” commented Ed Thomas, President and Chief Executive Officer. “Despite a tougher holiday season this year, we anticipate ending fiscal 2022 with a healthy, debt-free balance sheet and well-managed inventory.”
Vince Holding Corp
Vince Holding Corp has moved to a loss in its third-quarter as the company incurred costs related to the wind down of its Rebecca Taylor business. Net losses amounted to US$5.2m from a profit of $2.2m a year earlier. Net sales, however, were up 12.7% to $98.6m from $87.5m last year, reflecting a 14.4% increase in Vince brand sales and a 2.2% decrease in Rebecca Taylor and Parker sales, combined.
CEO Jack Schwefel said: “Like many other retailers, we have taken aggressive actions to reduce our inventory balance to better position us as we move into preparing for our next fiscal year. We believe these actions combined with our previously announced strategic decision to exit the Rebecca Taylor business, as well as our focus on driving further efficiencies and enhanced disciplines across our organization, will position Vince for long-term profitable growth.”
Oxford Industries reported a 26% increase in third quarter sales to $313m, with increases across all its brands. Operating income fell however from US$31m to $27m. This decrease reflects the gain on a sale of an unconsolidated entity in fiscal 2021, which was partially offset by improved operating income in Tommy Bahama. Net income fell to $19.6m from $26m a year earlier.
Tom Chubb, chairman and CEO, commented: “We are very pleased to be reporting record sales, gross margin and adjusted earnings for the sixth consecutive quarter. Our exceptional third quarter results were driven by the continued strength at our largest brand, Tommy Bahama, where we increased our sales 20% year-over-year, combined with strong top line growth across our entire portfolio of brands. Importantly, our performance was highlighted by another period of robust full-price selling as our merchandise offerings continue to resonate strongly with our core consumers. We also advanced our long-term strategy with our acquisition of the Johnny Was brand and the announcement of the first Tommy Bahama branded resort, the Tommy Bahama Miramonte Resort in Indian Wells, California, which is scheduled to open in late 2023.”
Claire Spofford, president and CEO of J.Jill, Inc. said: “We delivered better than expected Q3 earnings performance supported by our disciplined approach to flowing newness, full price selling, and inventory and expense management. These results reflect our ability to navigate within a challenging consumer environment as well as the increased planned strategic investments to support our growth strategies, including the August launch of our inclusive sizing initiative and Welcome Everybody campaign. We look forward to expanding on this progress and becoming more relevant for our core customer while also welcoming new customers.
“As we look ahead to the end of the fiscal year, we continue to take a cautious approach to our outlook. That said, we remain focused on executing against our operating model which has delivered strong financial results year to date.”
For Q4 the company expects revenues to be flat to down 3% and for Adjusted EBITDA to be in the range of $9.0 million and $11.0 million. For fiscal 2022, the Company expects revenues to grow between 4.0% and 5.0% compared to fiscal 2021, and for Adjusted EBITDA to be in the range of $103 million and $105 million.
Revenue down 2% to US$2.28bn compared to prior year period but up 7% on a constant currency basis. The group recorded a loss of $214m in Earnings Before Income Tax (EBIT) compared with a $377m profit. It attributed this to a noncash goodwill impairment charge of $417m, which was non-operational and driven by a significant increase in discount rates, and included in the prior year period was a net gain of $113m recorded in connection with the Heritage Brands transaction.Inventory rose 32% year-on-year as a result of abnormally low inventory levels in all regions in the prior year period and a planned increase in core product to mitigate supply chain and logistics disruptions, and elevated inventory levels in the North America wholesale business due to lower than expected demand.
Stefan Larsson, CEO of PVH Corp, commented: “We are pleased with our third quarter results as we delivered high single-digit constant currency top-line growth. This was ahead of our expectations, despite having to navigate continuing macroeconomic headwinds. Our strong performance reflects the power of our two global iconic brands, Calvin Klein and Tommy Hilfiger, and the pricing power we are able to achieve by delivering strong hero product, engaging closely with consumers, and elevating the customer experience. Our international businesses continued to execute well across both brands, even as macro conditions remain challenging in Europe and Covid impacts continued in Asia. In North America, we are encouraged by the positive performance indicators we are seeing, especially how consumers are responding to and engaging with our brands, although we recognize that we are in the early stages of a multi-year journey to unlock this region’s full opportunity.
“Through the PVH+ Plan, we seek to tap into our full potential by focusing on our core strengths and connecting our iconic brands closer to where the consumer is going than any time before. Our goal is to win with the consumer and achieve long-term profitable growth.”
Victoria’s Secret & Co.
Victoria’s Secret & Co. has reported a drop in earnings and sales in its third-quarter but says the company is committed to its long-term financial targets and reinvesting in the business. For the three months ended 29 October, earnings dropped to US$24m from $75m a year earlier. The result, however, was above the high end of Victoria’s Secret guidance. Third-quarter operating income was $43m compared to $108m last year. Net sales amounted to $1.32bn, representing a drop of 9% on sales of $1.44bn in the prior year quarter. Total comparable sales were down 11%.
CEO Martin Waters said: “We have created a solid financial platform with our new, more agile operating structure, and even in a very challenging macroeconomic environment, we were able to deliver third quarter operating income and earnings per diluted share results above our previous guidance. With our aligned focus on our customer and our strategic priorities, we are well-positioned to continue to navigate and execute in a shifting consumer landscape.
“At our Investor Day in October, we discussed our strategic growth plan which outlines significant runway ahead guided by our three key principles: strengthen our core, ignite growth, and transform the foundation. Led by our two category-defining brands and merchandise leadership positions in intimates and beauty, we remain confident in our ability to deliver our long-term financial targets, reinvest in our business, and return value to our shareholders.”
Victoria’s Secret is forecasting full-year 2022 net sales to decrease 6% to 7% compared to last year’s full year net sales of $6.78bn. At this forecasted level of sales, adjusted operating income is expected to be in the range of $525m to $575m, or approximately 8% to 9% of sales.
American Eagle Outfitters
US clothing chain American Eagle Outfitters has reported a drop in sales and earnings in its third-quarter but the retailer said results exceeded expectation. Total revenue was down 3% to US$1.2bn, while consolidated store revenues declined 4%. Digital sales were down 5%. AEO said its supply chain business, Quiet Platforms, contributed approximately 2 percentage points to revenue growth. Brand revenue declined 5%, better than the company’s expectation for a high single digit decline. The company’s gross margin rate of 38.7% compared to 44.3% last year as a result of higher markdowns and increased product costs. Earnings dropped to $81.3m from $152.2m last year.
“I’m pleased to deliver a third quarter that exceeded our expectations, with profit margins meaningfully improved from the first half of the year,” said CEO Jay Schottenstein. “Bold actions to rationalize inventory and reduce expenses are paying off. As we navigate the current macro environment, we remain focused on our strategic initiatives — leading with innovation and judiciously investing in capabilities that will differentiate us in the long-run. Our organization is strong and I have tremendous confidence in the resilience of our brands.”
Dick’s Sporting Goods
Dick’s Sporting Goods has booked a mixed third-quarter as sales increased but earnings fell 28%. Net sales were up 7.7% in the quarter to US$3bn. Comparable store sales increased 6.5% on top of a 12.8% increase in the third quarter of 2021, a 23.2% increase in the third quarter of 2020 and a 6% increase in the third quarter of 2019. Earnings amounted to $228m, representing a drop on earnings of $317m a year earlier. Despite this, the company has raised its full-year 2022 earnings per diluted share guidance to $10.50 to $11.10, up from $8.85 to $10.55 previously. Full year comparable store sales are expected in the range of negative 3% to negative 1.5%, up from negative 6% to negative 2% previously.
Net income and sales for the third quarter slumped at Foot Locker Inc but its management team remains upbeat and has upped the sales outlook for the fourth quarter and full year. Third-quarter comp-store-sales fell 0.8% year-on-year. Total sales fell 0.7% to $2.17bn. Net income fell to $96m from $158m.
“Foot Locker’s solid third quarter results in the midst of ongoing macroeconomic challenges are a testament to the strengths of this organization that I am honored to now be leading,” said Mary Dillon, president and CEO. “Despite the tough environment, our expanding customer base remained resilient, and I’m proud that our team delivered sales above our expectations, thanks to their exceptional execution. I see tremendous opportunity to further leverage the power of our brand equity and our incredible field team to drive our growth in this exciting category.”
Andrew Page, Executive Vice President and Chief Financial Officer, said, “Following better-than-expected results for the third quarter and strong momentum coming out of the quarter, we are increasing our outlook for the fourth quarter and the full year. While the macroeconomic environment remains uncertain, our demand trends, and inventory position in high-quality product gives us confidence we can achieve our new range, while also remaining flexible to manage through ongoing volatility.”
Foot Locker anticipates total sales to be down 4-5% from 6-7% a year earlier and comp sales to be down 4-5% from earlier guidance of 8-9%.
Ross Stores has recorded a drop in earnings and sales for the third quarter as a result of higher promotions and one-off costs. Earnings amounted to US$342m from $385m a year earlier, while net sales dropped slightly to $4.56bn from $4.57bn in the year ago period. Comparable stores sales were down 3%. Earnings per share for fiscal 2022 are projected to be in the range of $4.21 to $4.34 versus $4.87 last year. CEO Barbara Rentler said: “Third-quarter results were above our expectations as we delivered stronger values throughout our stores. Operating margin for the period was 9.8% versus 11.4% last year, reflecting the deleveraging effect from the comparable sales decline as well as pressure from higher markdowns and unfavourable timing of packaway-related costs.”
Rocky Brands moved to a profit in the third quarter as the US retailer booked higher sales despite macroeconomic headwinds. Net sales increased 17.5% to US$147.5m, while retail sales for the quarter increased 7.3% to $23.4m. Gross margin, however, was lower at 35.2% compared to 37.4% a year earlier, but the company booked a net profit of $5.7m from losses of $0.4m last year.
“The third quarter was highlighted by strong sales growth compared to the year ago period even as the macroeconomic headwinds pressuring consumer discretionary spending intensified,” said CEO Jason Brooks. “Our top line performance underscores the strength of our brand portfolio, the desirability of our innovative, functional footwear, and the important relationships we’ve established with our consumers and retail partners. These important aspects of our business, combined with actions we’ve already taken to address cost pressures and reduce expenses, have the company in a good position to weather this challenging operating environment.”
Columbia Sportswear has seen a 19% increase in net sales for the third quarter to a record US$955m. Operating income rose 9% to $145.3m. Net income rose 11% year-on-year to $111.8m.
Chairman, president and CEO Tim Boyle said: “Third quarter net sales and earnings growth reflect broad momentum across our business and the power of our collective brand portfolio. Our strong balance sheet, balanced global distribution, and operating discipline position us to successfully navigate this dynamic environment. I’m confident we have the right strategies in place to unlock the significant growth opportunities we see across the business.
“We are investing in our strategic priorities to: accelerate profitable growth; create iconic products that are differentiated, functional and innovative; drive brand engagement through increased, focused demand creation investments; enhance consumer experiences by investing in capabilities to delight and retain consumers; amplify marketplace excellence, with digitally-led, omni-channel, global distribution; and empower talent that is driven by our core values, through a diverse and inclusive workforce.”
US footwear brand Skechers booked a 20.5% increase in sales in the third quarter to US$1.88bn thanks to growth of 14.9% at home and a 24.6% increase in international sales, primarily driven by wholesale. Gross margin was 47.1%, a decrease of 280 basis points, due to increased freight and logistics costs. Net earnings were $85.9m, representing a drop of 16.7%.
“Skechers’ record third quarter sales reflect double-digit growth across our segments and in most countries. These results are a testament to the demand for our comfort technology products,” said CFO John Vandemore. “Despite multiple macroeconomic headwinds, from foreign exchange rates to supply chain challenges and ongoing Covid-related lockdowns, we remain focused on our long-term growth strategy. We are encouraged that demand remains strong and as these headwinds moderate, we expect to see continued revenue growth and improved operating leverage.”