US Q3 in brief – Burlington, Nordstrom, Dick’s Sporting Goods - Just Style
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US Q3 in brief – Burlington, Nordstrom, Dick’s Sporting Goods

25 Nov 2021 (Last Updated November 26th, 2021 12:55)

Burlington Stores

Burlington Stores reported net sales of US$2.3bn for the three months ended 30 October, compared to $1.7bn a year earlier. Net income, meanwhile, amounted to $13.6m, up from $8m last time.

 CEO Michael O’Sullivan said: “We are very pleased with our third quarter results. We continued to demonstrate our ability to chase the business and deliver great value to our customers. As predicted, freight and supply chain headwinds pressured margins in Q3. We fully expect these headwinds to moderate over time and, as they do, this should generate very attractive off-price buying opportunities as well as significantly lower expenses.”

Nordstrom

Nordstrom has reported third-quarter net earnings of US$64m for the three months ended 30 October, compared to $53m in the prior-year period. Net sales increased 18% to $3.53bn versus the same period in fiscal 2020, 0, during which the entire Anniversary Sale temporarily shifted to the third quarter. For the Nordstrom banner, net sales increased 11% on last year, while Nordstrom Rack sales were up 35%. Digital sales decreased 12% compared with the same period in fiscal 2020, and represented 40%  of total sales during the quarter. Comparable sales in suburban area stores continued to be stronger than urban stores in the third quarter, with both improving sequentially over the second quarter. Gross margin of 35% increased 230 basis points compared with the same period in fiscal 2020 primarily due to fewer markdowns and leverage from higher net sales.

The company is reaffirming its financial expectations for fiscal 2021 and expects revenue, including retail sales and credit card revenues, to grow more than 35% versus fiscal 2020.

Dick’s Sporting Goods

Sporting goods retailer Dick’s Sporting Goods said net sales for the third quarter of 2021 were US$2.75bn, an increase of 13.9% compared to the third quarter of 2020. Consolidated same store sales increased 12.2%, while e-commerce sales edged up 1% on the prior-year period. Driven by strong sales and gross margin rate expansion, the company reported consolidated net income of $316.5m, compared to $177.2m a year earlier. On a non-GAAP basis, consolidated net income was $322.2m, compared to $182.2m.

Dollar Tree

Dollar Tree CEO Michael Witynski said the company experienced a strong finish to the quarter ended 3 October which saw consolidated net sales increase 3.9% to US$6.42bn from $6.18bn in the prior year period. Enterprise same-store sales increased 1.6%, and increased 6.7% on a two-year stacked basis. Dollar Tree same-store sales edged up 0.6% on a constant currency basis (or 0.8% when adjusted to include the impact of Canadian currency fluctuations). Same-store sales for Family Dollar increased 2.7%, cycling the 6.4% rise in the prior year’s quarter. Net income was $216.8m, compared to $330m last time, while gross margin narrowed to 27.5% from 31.2% in the prior year’s quarter. The decrease in gross margin was driven primarily by higher freight costs, partially offset by improved shrink results.

Guess

“We are very pleased with our performance this quarter, which exceeded our expectations for revenues and earnings,” said Guess, Inc CEO Carlos Alberini. For the third quarter of fiscal 2022, Guess recorded GAAP net earnings of US$29.9m, a 13.3% increase from $26.4m for the third quarter of fiscal 2021. Adjusted net earnings were $41.6m, an 11.2% increase from $37.4m last time. Total net revenue, meanwhile, was up 13%to $643.1m from $569.3m in the same prior-year quarter. In constant currency, net revenue increased by 12.8%.

Guess said for the full fiscal year 2022, assuming no increased Covid-related shutdowns from current levels, it expects revenues to be down low-single digits versus fiscal 2020. It added the comparisons are versus the pre-pandemic periods from two fiscal years prior in order to provide a more normalised comparison.

Abercrombie & Fitch

Abercrombie said net sales of US$905m were up 10% in the third quarter ended 30 October as compared to last year, with digital net sales rising 8% to $413m. Net income attributable to Abercrombie & Fitch Co amounted to $47.2m, up from $42.3m last time, while gross margin of 63.7% was down about 30 basis points as compared to last year. The year-over-year decline is driven by about 300 basis points of higher average unit cost from freight inflation and efforts to offset supply chain issues, almost fully offset by higher average unit retail on lower promotions.

CEO Fran Horowitz said: “The start of the holiday season has been promising. Customers have come out early to shop and have been responding well to assortments. We continue to actively manage through ongoing supply chain constraints, including production and delivery delays and elevated costs, and are confident that we have the product, marketing voice and omnichannel experience to surprise and delight new and existing customers throughout the fourth quarter.”

American Eagle Outfitters

“As strong demand for our merchandise and brands continues, I’m very pleased to report another quarter of record revenue and profit,” said American Eagle Outfitters (AEO) CEO Jay Schottenstein. For the third quarter ended 30 October, total net revenue increased US$242m, or 24% to $1.27bn from $1.03bn in the third quarter of 2020. Aerie brand revenue of $315m rose 28% on top of 34% growth last year. American Eagle revenue of $941m was up 21% versus the same period last year after an 11% decline in the period. Consolidated store revenue grew 29%, while total digital revenue increased 10%. Net income, meanwhile, was $152.22m, compared to $58.11m last time. Gross margin of 44.3% expanded 410 basis points from 40.2% and reflected the highest rate since 2007.

Urban Outfitters

Urban Outfitters said total company net sales for the three months ended 31 October 31, 2021, were a record US$1.13bn, up from $969.6m last year. Sales were up at all of the group’s brands in the quarter, while net income increased to $88.9m from $76.7m a year prior.

“I’m pleased to announce our teams produced record Q3 sales and earnings,” said CEO Richard Hayne. “We are excited that November ‘comp’ sales to date for all brands have accelerated from their Q3 rate.”

Foot Locker

Foot Locker said total sales for the third quarter ended 30 October increased 3.9% to US$2.19bn from $2.1bn in the corresponding prior-year period. Excluding the effect of foreign exchange rate fluctuations, total sales for the third quarter increased by 3.6%. Third-quarter comparable-store sales were up by 2.2%. Net income amounted to $158m, compared with $265m a year prior, while gross margin expanded 380 basis points to 34.7% from the 30.9% last time.

“The third quarter was another period of strong performance for our company that reflects the powerful connectivity we have built with our customers,” said chairperson and CEO Richard Johnson. “These impressive top and bottom-line results were against a robust back-to-school season from last year and in spite of the ongoing supply chain challenges.”

CFO and executive VP Andrew Page added the company expects global supply chain constraints to persist throughout the fourth quarter but believes it is positioned for the holiday season, with positive momentum and inventory levels ready to meet customer demand.

The Children’s Place

The Children’s Place reported record third-quarter net sales for the three months ended 30 October. Net sales increased US$132.6m, or 31.2%, to $558.2m from $425.6m a year earlier, primarily driven by strong customer response to product assortment and the strategic reset of pricing and promotions. Comparable retail sales were 36.2% for the quarter. Net income increased $65.6m to $78.9m from $13.3m in the comparable period last year. Adjusted net income was $80.8m, compared to $19.7m a year earlier.

CEO and president Jane Elfers said: “While we are only a few weeks in, Q4 is off to a very strong start. We continue to operate at a high level, while navigating the ever-changing Covid landscape. We remain firmly on offense and we look forward to continuing to deliver accelerated operating margin expansion for 2021 and beyond.”

The Children’s Place recently tapped into the $8bn tween apparel market with the launch of a new fashion line – Sugar & Jade.

Caleres 

Calares hailed all-time record quarterly earnings, with record quarterly sales at Famous Footwear for the third quarter ended 30 October. Net sales were US$784.2m, up 21.1% from the third quarter of fiscal 2020. The company reported a 26.3% sales increase in the Famous Footwear segment, a 12.3% rise in the Brand Portfolio segment, and said direct-to-consumer sales represented 73.5% of total net sales. Net income of $59.6m compared to $14.4m last year. Adjusted net income was about $61.5m, compared to $18.2m last time. Gross margin was 42.8% or a 308-basis point improvement over the third quarter 2020.

Victoria’s Secret & Co

Victoria’s Secret & Co reported net income of US$75.2m for the third quarter ended 30 October 2021, compared to $143.4m in the prior-year period. Net sales amounted to $1.44bn marking an increase of 7% on $1.35bn last year.

CEO Martin Waters said: “I am very pleased with our solid third-quarter performance which reflects growth in all core categories. Our work to transform our brand, deepen our customer connections and improve our operational fundamentals is gaining positive traction.

The company is forecasting fourth-quarter 2021 sales to be in the range of flat to up 3% versus last year’s fourth-quarter sales of $2.1bn.

Macy’s

Macy’s said quarterly net sales and earnings exceeded expectations in the three months ended 30 October 2021. Net sales amounted to US$5.44bn, compared to $3.99bn in the prior-year period, while comparable sales were up 37.2% on an owned basis and up 35.6% on an owned-plus-licensed basis versus 2020. Digital sales increased 19% versus last year, while digital penetration was 33% of net sales, a five percentage point expected decline from the third quarter of 2020. Net income amounted to $239m, compared to a net loss of $91m last time, while gross margin for the quarter was 41%, up from 35.6% a year prior.

Macy’s now expects net sales of $24.12bn-$24.28bn for the full year compared to previous guidance of $23.55bn-$23.95bn.

The US department store retailer recently revealed plans to launch a curated digital marketplace to introduce a range of new categories, by enabling selected third-party merchants to sell their products on macys.com and bloomingdales.com.

Target Corporation

Department store retailer Target Corp said total revenue of US$25.7bn grew 13.3% in the third quarter ended 3 October, compared with the same period last year, driven by total sales growth of 13.2% and a 22.3% increase in other revenue. Comparable sales grew 12.7%, reflecting comparable store sales growth of 9.7% and comparable digital sales growth of 29%. Net earnings, meanwhile, amounted to $1.49bn, compared to $1.01bn in the prior-year period. Gross margin rate was 28%, compared with 30.6% last time. Target said this year’s gross margin rate reflected pressure from higher merchandise and freight costs, increased inventory shrink, and increased supply chain costs from increased compensation and headcount in the company’s distribution centres.  These pressures were partially offset by a slight benefit from favourable category mix.

For the fourth quarter 2021, the company expects high-single digit to low-double digit growth in comparable sales, compared with the previous guidance for a high-single digit increase.

The TJX Companies

Off-price apparel and home fashions retailer The TJX Companies reported net sales for the third quarter ended 30 October of US$12.5bn, an increase of 24% on the prior-year period. Overall open-only comp store sales increased 14% over a 4% increase in the third quarter of Fiscal 2020. Net income during the period was $1.02bn, compared to $866.7m last time, while gross profit margin was 29.5%, a 0.7 percentage point increase versus the third quarter of Fiscal 2020.

The company did not provide financial guidance but noted for the start of the fourth quarter of Fiscal 2022, overall open-only comp store sales growth is up mid-teens over the fourth quarter of Fiscal 2020.

Walmart

US retail giant Walmart said total revenue for the third quarter amounted to US$140.5bn, an increase of 4.3%. Revenue was negatively affected by about $9.4bn related to divestitures. Excluding currency, total revenue would have increased 3.3% to $139.2bn. Walmart US posted a 9.3% rise in net sales to $96.6bn, while US comp sales increased 9.2% in the quarter. Operating income increased 5.9%. Walmart US e-commerce sales grew 8% for the quarter and 87% on a two-year stack. Net sales at Walmart International, meanwhile, were $23.6bn, a decrease of $5.9bn, or 20.1%, negatively affected by $9.4 bn related to divestitures. Changes in currency exchange rates positively affected net sales by about $1.3bn. Flipkart, China, and Mexico delivered strong growth in e-commerce. Consolidated net income attributable to Walmart for the three months to 31 October amounted to $3.1bn, compared to $5.1bn a year prior. Consolidated gross profit rate decreased 42 basis points, primarily due to increased supply chain costs, a higher mix of lower margin fuel business in the U.S. and a shifting international format mix.

Dillard’s

Dillard’s CEO William Dillard II reported the company has hailed ‘another record quarter’ which saw comparable retail sales increase by 48% on the prior-year period. For the 13 weeks ended 30 October, net sales amounted to US$1.48bn, compared to $1.02bn last time. Sales include the operations of the company’s construction business, CDI Contractors, LLC (CDI). Total retail sales (which excludes CDI) increased 47% to $1.46bn from $994.6m. Net income, meanwhile, was $197.3m compared to $31.9m for the prior year third quarter. Included in net income for the prior year third quarter is a net tax benefit of $32.4m related to the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Pretax loss of $2.2m primarily related to the sale of a store property was also included in net income for the prior year third quarter. Consolidated gross margin (which includes CDI) expanded to 46.2% from 35.7%, while retail gross margin (which excludes CDI) was 46.7% compared to 36.6% last time.

Wolverine Worldwide

Wolverine Worldwide CEO Blake Krueger said the company delivered strong double-digit revenue growth and exceptional earnings leverage in the third quarter, despite the increased supply chain disruption caused by Vietnam factory closures and global logistics delays. For the period ended 2 October, reported revenue was US$636.7m, up 29.1% versus the prior year. On a constant currency basis, revenue was up 28.2%. E-commerce reported revenue was up 45% versus the prior year and up 126% versus 2019. The company reported a net loss of $0.8m in the period, compared to net earnings of $21.7m last time. Reported gross margin was 43.2%, compared to 41% last time. Adjusted gross margin was 44.6%, compared to 41.3%. Underlying revenue, excluding Sweaty Betty which Wolverine acquired in August, was $597.6m, up 21.2% on the prior year. E-commerce underlying revenue was up 13.3%, while adjusted underlying gross margin was 43.2%, compared to 41.3% a year earlier.

For the full 2021 fiscal year, the company now expects revenue of about $2.4bn resulting in nearly 35% growth versus the prior year. This revenue outlook represents mid-single-digit growth over 2019 (including Sweaty Betty), and low-single-digit growth excluding Sweaty Betty.

HanesBrands

HanesBrands said net sales from continuing operations for the third quarter ended 2 October, totalled US$1.79bn, an increase of $98m, or 6%, including 33% growth in Champion brand sales globally. This compared with $1.69bn for the prior-year quarter which included $179m in sales of personal protective equipment (PPE). Excluding PPE, net sales increased $276m, or 18%, over the prior year. Innerwear sales decreased 11% on the same period a year ago due to the overlap of last year’s $166m of PPE sales, while activewear sales grew 42% driven by strong double-digit growth in both the Champion and Hanes brands. International segment revenue increased $30m, or 6%, compared to prior year. Excluding $13m of PPE sales in the prior year quarter, third-quarter sales increased 9% on a reported basis and 7% on a constant currency basis. Net income amounted to $151.78m, compared to $103.28m last time, while GAAP gross margin of 39.1% increased 530 basis points compared to the prior year. Adjusted gross margin of 39.1% rose 250 basis points. The margin expansion was driven by cost savings programmes in the supply chain and the benefits from business mix, which more than offset higher transportation and inflation costs.

For fiscal-year 2021, Hanes currently expects net sales from continuing operations to total about $6.76bn-$6.83bn, representing 11% growth over the prior year at the midpoint and includes a projected benefit of about $108m from changes in foreign currency exchange rates. This compares to net sales of $6.13bn in 2020, which included $820m in sales of PPE and about $45m from the 53rd week. Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 29% over the prior-year period.

Kontoor Brands

Kontoor Brands reported a 12% increase in revenue on a reported basis for the three months ended 2 October to US$652.3m. On a constant currency basis, sales were up 11% over the same period in the prior year. Wrangler brand global revenue increased to $422m, a 22% rise over the same period in the prior year on a reported basis and 21% on a constant currency basis. Lee brand global revenue amounted to $228m, a 6% increase over the same period last year on a reported basis and 4% in constant currency. Other global revenue declined to $3m driven by impacts from the strategic actions related to VF Outlet operations. Net income, meanwhile, was $63.4m, compared to $60.8m in the same period last year, while gross margin increased 20 basis points to 44.4% of revenue, compared to the same period in the prior year. Adjusted gross margin expanded 80 basis points to 44.1%. Favourable channel, customer and product mix, as well as business model changes, were the primary drivers of gross margin gains in the quarter. Higher transitory air freight expenses in support of strong demand negatively impacted gross margin by 180 basis points in the quarter.

The company is raising its fiscal 2021 outlook and now expects revenue to increase at a high-teens percentage over 2020, to $2.47-$2.48bn, as compared to a mid-teens percentage in the prior guidance.

The Buckle

The Bucke said comparable store net sales for the 13-week third quarter ended 30 October, increased 27.3% from comparable store net sales for the prior-year period. Net sales were also up 27.3% to reach $319.4m from net sales of $251m a year earlier.

The company will announce third-quarter earnings on 19 November.

Steven Madden

Steve Madden has reported what CEO Edward Rosenfeld said is the company’s highest quarterly sales and earnings in its history for the three months ended 30 September. Revenue increased 52.4% to US$528.7m from $346.9m in the same period of 2020. Retail revenue was $123.1m, a 108.6% on last year, while gross profit as a percentage of retail revenue rose to 65.9% compared to 63.8% in the prior-year period. Net income attributable to Steven Madden, Ltd. was $66.6m, compared to net loss of $7m last time. Adjusted net income attributable was $31.8m.

For fiscal 2021, the company now expects revenue will increase 50-52% over fiscal 2020.

Under Armour

“Our third-quarter results were driven by strong demand for the Under Armour brand and our ability to execute quickly to meet the needs of our consumers and customers,” said Under Armour president and CEO Patrik Frisk. For the quarter ended 30 September, revenue was up 8% to US$1.5bn, or 6% on a currency-neutral basis, compared to the prior year. Direct-to-consumer revenue increased 12% to $604m, driven by a strong performance in owned and operated stores offset by a 4% decline in e-commerce, which represented 33% of the total direct-to-consumer business. Apparel revenue was up 14% to $1.1bn, while footwear sales increased 10% to $330m. Accessories revenue fell 13% to $126m. Net income, meanwhile, was $113.4m, compared to $38.9m a year prior. Gross margin increased 310 basis points to 51%, driven by benefits from pricing and channel mix, offset by the absence of MyFitnessPal and supply chain headwinds.

For the full year, revenue is expected to be up about 25% compared to the previous expectation of a low-twenties percentage increase, reflecting a high-twenties percentage growth rate in the US and a mid-thirties percentage growth rate in the international business.

Rocky Brands

Rocky Brands CEO Jason Brooks said the company continued to experience robust demand for its portfolio of leading brands during the third quarter. For the three months ended 30 September, net sales increased 61.4% to US$125.5m compared with $77.8m in the same period a year ago. Third-quarter 2021 net sales include $41.6m in Boston Group net sales. Retail sales were up 35.3% to $21.8m from $16.1m for the same period last year. The company reported a third-quarter net loss of $0.4m, compared to net income of $7.6m in the third quarter of 2020. Adjusted net income was $2.5m. Gross margin narrowed to 37.4% from 38.4% last time. Adjusted gross margin was 38.1%. The 30-basis point decrease to adjusted gross margin was mainly attributable to lower wholesale segment gross margins due to an increase in capitalised manufacturing and sourcing costs associated with the acquired brands 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.

Carter’s

Carter’s chairman and CEO Michael Casey said the company meaningfully exceeded its earnings objectives for the third quarter with net income for the three months ended 2 October amounting to US$85m, compared to $81.2m a year prior. Adjusted net income was $84.9m, compared to $85.9m last time. Net sales, meanwhile, increased $25.5m, or 2.9%, to $890.6m, driven by growth in the company’s international and US retail business segments. International and US retail segment sales grew 15% and 4%, respectively. Favourable changes in foreign currency exchange rates improved consolidated net sales in the third quarter of fiscal 2021 by $5.6m.

For fiscal 2021, Carter’s projects net sales will be about $3.45bn.

Skechers

Skechers chief operating officer David Weinberg said the sports footwear brand achieved a new third-quarter sales record and explained it was a remarkable achievement given the ongoing supply chain disruptions. For the third quarter ended 30 September, net revenues of US$1.5bn increased 19.2% on a reported basis, compared to the same period in the prior year. This result is due to a 20.1% increase in domestic sales and an 18.6% increase in international sales. Direct-to-Consumer (DTC) net revenues were up 44.1% and were led by domestic and international retail stores. Direct-to-Consumer sales grew across all channels and comparable same store sales increased 31.0%, driven by an increase of 33.7% domestically and 25.1% internationally. Domestic and international wholesale sales grew over 10%. The increases in international wholesale came largely from double-digit increases in distributor sales, and strong performance in markets like China and India. Net income, meanwhile, amounted to $103.1m compared to $64.3m in the same same period last year. Gross margin was 49.6%, from 48.1% a year prior, an increase of 150 basis points.

Weinberg said: “As we look to the fourth quarter and into the first half of 2022, we believe supply chain constraints will remain a challenge, although we are beginning to see progress in key global ports, especially in Europe and other international markets. Nonetheless, we are proud of the execution of our global team to deliver our comfort technology footwear to retail stores and our partners around the world to meet the strong demand for Skechers products.”

Crocs

Crocs has reported record third-quarter revenues of US$625.9m for the period ended 30 September, marking a 73% increase, or 72.2% on a constant currency basis, as compared to 2020. Revenue growth was strong in all regions, with the Americas up 94.5%, Asia Pacific up 21.2%, and Europe, Middle East, and Africa (EMEA) up 42.8% on a constant currency basis versus the prior year. Digital sales grew 68.9% to represent 36.8% of revenues versus 37.7% and 32.2% of revenues in 2020 and 2019, respectively. Within digital, all regions experienced double-digit growth from the prior year. Direct-to-consumer (DTC) revenues grew 60.4%. Net income for the period was $153.5m, compared to $61.9m a year prior, while gross margin of 63.9% increased 670 basis points compared to 57.2% last year. Adjusted gross margin of 64.2% rose 680 basis points. For the full year, Crocs expects revenue growth to be between 62 to 65% compared to 2020 revenues of $1.39bn. 

“Our third quarter was exceptional, underscored by 73% revenue growth over 2020 and industry-leading operating margin of 32%,” said CEO Andrew Rees.

“Globally, our teams are managing through the supply chain disruptions to mitigate the impact on our business. Despite the temporary disruptions, we expect 2022 revenues to grow over 20% from 2021 fuelled by the strength of our brand and consumer demand globally.”

Levi Strauss & Co

CEO of Levi Strauss & Co Chip Bergh said the denim giant delivered a strong quarter with revenue growth versus pre-pandemic 2019 levels, despite a more difficult macro-environment than expected. For the third quarter ended 29 August, net revenues of US$1.5bn increased 41% on a reported basis, and 38% on a constant-currency basis, compared to the same period in the prior year. Direct-to-Consumer (DTC) net revenues were up 34% due to increased revenues from company-operated stores. As a percentage of third-quarter company net revenues, sales from DTC stores and e-commerce comprised 30% and 6% percent respectively. The company’s global digital net revenues grew about 10% compared to the same period in the prior year and comprised about 20% of third-quarter fiscal 2021 net revenues. Net income, meanwhile, amounted to $193m, compared to $27m last time. Adjusted net income was $197m, compared to $31m. Gross margin was 57.6%, up from 54.3% a year prior, while adjusted gross margin was 57.5%, an increase of 390 basis points. The increase in gross margin reflects a higher proportion of sales in the DTC channel, which has higher gross margins, price increases, lower promotions, and a higher share of full-price sales. Favourable currency exchange rates benefited year-over-year comparisons by about 20 basis points.

For the fourth quarter, the company expects reported net revenues growth of 20 to 21% compared to the fourth quarter of fiscal 2020.