In the most recent third-quarter filings from US apparel and footwear brands and retailers, Deckers Brands exceeded expectations, while Boot Barn Holdings saw earnings nearly double. Destination Maternity, meanwhile, widened its losses.
A more refined product strategy, enhanced consumer messaging, wholesale account optimisation, and more favourable weather all contributed to higher earnings and sales in the quarter for Deckers Brands. Earnings jumped to US$90.9m from $26.6m a year earlier, while gross margin widened to 52.2% from 50.5%. Net sales were up 6.6% to $810.5m, and on a constant currency basis increased 6.3%. “Our third-quarter results, which meaningfully exceeded expectations, underscore the progress we have made developing a stronger foundation to support profitable growth,” said CEO Dave Powers.
Boot Barn Holdings
Solid sales growth thanks to a healthier consumer environment boosted earnings for Boot Barn Holdings in its third-quarter. Net income nearly doubled to reach US$20.1m from $10.5m a year earlier. Gross margin widened to 32% from 31.8% thanks to a 12.7% increase in net sales to $224.7m. Same-store sales were up 5.2% in the period, driven by new store openings and the acquisition of four in February last year.
The Finish Line
The full-year outlook at The Finish Line remains unchanged, as sales climbed and net loss narrowed in the third quarter. For the 13 weeks to 25 November, net loss totalled US$12.9m, compared to $40.4m in the year-ago period. Net sales meanwhile, reached $378.5m, an increase of 1.8% over the prior year, while comparable store sales increased 0.8% and Finish Line Macy’s sales by 2.3%.”We finished the third quarter ahead of expectations despite a highly promotional environment for athletic footwear,” said CEO Sam Sato. “The growth initiatives that we’ve put in place are driving increased traffic to our brand and helping increase conversion.
“Looking ahead, we continue to be cautious in the near-term, but I am confident that the work we are doing to position the company for long-term growth and enhanced profitability is gaining traction.”
Cherokee Global Brands
Cherokee widened its GAAP net loss to US$2.5m in the third quarter, compared to GAAP net loss of $0.87m in the year-ago period. Non-GAAP net loss amounted to $0.74m from income of around $0.7m last year. Total revenues meanwhile, were up 69.2% to $11m compared to $6.5m in the year-ago period. CEO Henry Stupp said the company has executed several new license agreements to expand the reach of its Cherokee, Tony Hawk, Hi-Tec, and Magnum brands into new markets and categories. Most notably, Stupp says thecompany is pleased to announce a pan-European license agreement for its Cherokee brand in over 10,000 locations and about 30 countries beginning next autumn. He adds the newlicense agreements are expected to generate “meaningful new royalty streams” in fiscal 2019.”
Vince Holding CEO Brendan Hoffman said the company is pleased with its results in the third quarter, which reflected double digit comparable store sales growth in both full price stores and its e-commerce channel. For the period ended 28 October, net income was US$3.5m compared to $3.4m for the third quarter of fiscal 2016. Net sales meanwhile, increased 4.1% to $79.1m from $76m last year. Comparable sales increased 4.4%, including e-commerce sales, due to an increase in average unit retail. Gross margin narrowed to46.4% from 50% in the year-ago period and was negatively impacted by higher product and supply chain costs, higher markdowns in the direct-to-consumer segment and one-time costs to execute the wholesale distribution strategy. This was partially offset by a decrease in the rate of sales allowances as well as reduced discounts in the off-price wholesale channel.
Allen Weinstein, the interim CEO of Destination Maternity has expressed his dissatisfaction with the company’s third-quarter results after moving to a wider loss, but said it was a “productive period” for the firm. “I feel confident that we have many opportunities to improve our operations and performance, with the benefit of a strong and talented team and a solid infrastructure on which to grow,” he said as the company revealed a loss of US$7.5m from $1.5m a year earlier. Net sales were down 6% to $96.4m, while comparable sales edged up 1.1%. Gross margin was down ten basis points to 52.8%.
Dollar General CEO Todd Vasos said the company is pleased with its overall third quarter results, which included a “strong” same-store sales growth of 4.3% and increases in both average transaction amount and customer traffic compared to the same period last year. For the 13 weeks ended 3 November, net income jumped 7.3% to US$252.5m from $235.3m in the year-ago quarter. Net sales meanwhile, increased 11% to $5.90bn, compared to $5.32bn last year. Same-store sales increased 4.3 percent, attributable to increases in average transaction amount and customer traffic, including an estimated 30 to 35 basis point net benefit from hurricane-related sales. Gross profit, as a percentage of net sales, was 29.9% in the quarter, an increase of eight basis points from the same period last year.
Tailored Brands has booked a mixed third-quarter as sales and margin declined, while earnings saw an increase. For the three months ended 28 October, earnings reached US$38.9m from $28.4m a year earlier. Gross margin was down 30 basis points to 44.2%. Net sales, meanwhile, dropped 4.3% to $810.8m, and net sales by 2.1% as a result of last year’s store closures. Retail segment comparable sales edged up 0.1%.
American Eagle Outfitters
American Eagle Outfitters CEO Jay Schottenstein said the third quarter produced record sales, sequential margin improvement and marked eleven straight quarters of comp sales growth. For the period ended 28 October, total net revenue increased 2% to US$960.4m from $940.6m in the year-ago while consolidated comparable sales were up 3%, following a 2% increase last year. Gross margin declined 120 basis points to 39% from 40.2% last year, primarily due to higher promotions and increased shipping costs associated with a strong digital business. Net income meanwhile, slipped 6.6% to $63.7m, compared to $75.8m last year. Schottenstein added he is “very pleased” to see strong momentum continue into the fourth quarter, positioning the company well for the next few critical weeks of the holiday season.
G-III Apparel has increased its guidance for the full year after posting a 15.6% rise in earnings in the third quarter. For the period ended 31 October, the company reported net income of US$81.6m, compared to $70.6m in the prior-year quarter. Net sales meanwhile, increased by 16% to $1.02bn, up from $883.5m last year. This increase includes about $88m of net sales from the company’s DKNY and Donna Karan products. As a result, the company has increased its prior net income guidance for fiscal 2018, noting “excellent” wholesale net sales across all major brands in the third quarter and a strong order book. It is now forecasting net income of between $66m and $71m, or between $1.33 and $1.43 per diluted share, up from forecasted net income of between $56m and $60m, or between $1.11 and $1.21 per diluted share. It continues to expect net sales of about $2.80bn.
Lands’ End has sounded an upbeat note as it moved to a profit in the third-quarter. Net income in the period ended 27 October amounted to US$0.2m, compared to a net loss of $7.2m last year, while gross margin widened to 43.6% from 42.9% in the year-ago period. Net revenues, meanwhile, edged up 4.5% to $325.5m from $311.5m. Direct segment sales increased 6.7% to $290.3m, but retail segment sales dropped 10.8% to $35.1m. Same store sales for the quarter decreased 1.3%.
Sears narrowed its net loss to US$558m in the third quarter, compared to $748m in the year-ago period. For the three months ended 28 October, net sales slipped to $3.7bn, compared with revenues of $5.bn in the prior year quarter, with store closures contributing to over half of the decline. Sears said revenues were also negatively impacted by reductions in the number of pharmacies in open Kmart stores, as well as the reduction in consumer electronics assortments in both Kmart and Sears stores. Comparable sales fell 17% at Sears, and 13% at Kmart, for a company-wide decline of 15.3%.
Despite multiple natural disasters that impacted PVH Corp’s North American business, third-quarter results exceeded company expectations. Net sales were up 5% to US$2.4bn, while earnings jumped to $239.2m from $126.2m a year earlier. PVH said it continues to over-deliver against its 2017 plan, driven by the continued momentum across its Calvin Klein International and Tommy Hilfiger businesses and ongoing operating efficiencies. The company raised its full-year outlook, and now expects earnings per share on a GAAP basis in a range of $6.80 to $6.82, and revenue to increase by around 7%.
Perry Ellis has moved to a profit in its third-quarter thanks to what CEO Oscar Feldenkreis calls the company’s ability to appeal to today’s consumer. Net income in the period amounted to U$3.2m, compared to a net loss of $5.2m in the year-ago quarter. Total revenues were $199m, at the high end of the company’s guidance, from $194m last year. GAAP gross margin expanded 60 basis points to 37.3% from 36.7%, while adjusted gross margin was also 37.3% compared with 36.8% in the comparable period of the prior year.
Express said comparable sales and earnings, excluding the hurricane impact, were at the top end of its guidance for the third quarter as its key initiatives continue to gain traction. For the 13 weeks ended 28 October, the company recorded net income of US$6.3m compared to net income of $11.6m in the year-ago period. The company said earnings in the prior-year quarter includes a net $0.04 per diluted share benefit. Gross margin meanwhile, declined by 240 basis points to 29.8% from 30% last year. Net sales decreased 1% to $498.7m from $506.1m in the third quarter of 2016. Comparable sales (including e-commerce sales) fell 1%, compared to an 8% decline last year.
Tilly’s booked increases in both earnings and revenue in its third-quarter, with CEO Ed Thomas saying it is now the “appropriate time” to plan for moderate growth by targeting to open around ten to 15 new stores in fiscal 2018. For the period ended 28 October, net income jumped 36.5% to US$8.8m from $6.4m in the year-ago quarter. Net sales were up 0.5% to $152.8m, compared to $152.1m last year, while comparable store sales, which includes e-commerce sales, increased 1.5%. Gross margin widened to 32.8% from 31.5% last year. Tilly’ said this 130 basis-point increase was attributable to a 100 basis-point reduction in buying, distribution and occupancy costs, and a 30 basis-point improvement in product margins as a result of reduced markdowns.
Fashion retailer Guess Inc moved to a loss in the third quarter as sales declined in the Americas. For the three months ended 28 October, GAAP net loss totalled US$2.86m, compared to GAAP net income of $9.1m in the year-ago period. Total net revenue meanwhile climbed 3.3% to $554.1m from $536.3m last year. In constant currency, net revenue increased by 0.6%. Sales in Europe and Asia were up 18.8% and 16.8%, respectively, while in the Americas sales were down 13.4%. GAAP operating margin decreased 300 basis points to negative 0.2%, from 2.8% in the prior-year quarter, driven primarily by net losses on lease terminations incurred during the current year-quarter and higher performance-based compensation costs.
CEO of footwear retailer Caleres Diane Sullivan said the company’s “strong start” to the third quarter in August was interrupted by hurricanes in September and an unseasonably warm start to fall in October. For the 13 weeks ended 28 October, net earnings amounted to US$34.4m, compared to $34.7m in the year-ago period. Gross margin of 40.9% was up 79 basis points, while net sales were up 5.8% to $774.7m from $732.2m in the prior year. Famous Footwear total sales of $473.1m were up 1.1%, while same-store-sales were up 0.9%. Brand portfolio sales meanwhile, were up 14% to $301.5m, including contribution from Allen Edmonds, which was acquired in December of 2016.
US discount retailer Dollar Tree delivered what CEO Gary Philbin called “terrific results” in the third quarter, as both earnings and revenue increased. In the quarter ended 28 October, net income grew US$68.3m to $239.9m from $171.6m in the year-ago period. Net sales meanwhile, were up by 6.3% to $5.32bn from $5bn last year. Same-store sales for the Dollar Tree banner increased 5%,while those for the Family Dollar banner increased 1.5%. Gross margin edged up to 31.3% compared to 30.4% in the prior year, with improvement driven primarily by lower merchandise costs, markdowns and occupancy costs as a percentage of sales.
Chico’s CEO Shelley Broader said the company’s results were in line with expectations for the third quarter, as net income slipped to US$16.7m from $23.6m in the period. For the 13 weeks ended 28 October, net sales fell 10.8% to $532.3m, compared to $596.9m in the year-ago quarter. The company said the fall primarily reflects a decline in comparable sales of 8.2%, driven by lower average dollar sale and a decline in transaction count. Gross margin for the period decreased 160 basis points to 37% from 38.6% last year. Chico’s said the decline primarily reflects deleverage of store occupancy costs as a percent of sales and store impairment charges related to the hurricanes Harvey, which had an unfavourable impact of about $5m after-tax.
US fashion retailer J Crew has widened its net loss in the third quarter as transformation and transaction costs took their toll. Net loss totalled US$17.6m in the period, compared to $7.9m last year, while gross margin increased to 40.1% from 38.1% in the first quarter last year. Total revenues meanwhile, slipped 5% to $566.7m while comparable company sales fell 9% following a decrease of 8% in the third quarter last year. Sales at J Crew slipped 12% to $430.4m, while those at Madewell rose 22% to $107.5m. CEO Jim Brett said the company’s goal is to “reinvigorate the J Crew brand to reflect the America of today and to continue to drive strong momentum in the Madewell Brand”.
Burlington Stores has booked higher sales in its third-quarter and earnings ahead of guidance. Net income increased 38% over the prior year period to US$45m, while gross margin expanded 100 basis points over last year’s levels to 42.2%, driven primarily by increased merchandise margin. In addition, product sourcing costs as a percent of sales were flat on a rate basis to the prior year’s quarter. Total sales increased 7.1% to $1.44bn, driven by an incremental $60m from new and non-comparable stores, as well as a 3.1% increase in comparable store sales.
The unusually severe hurricane season impacted DSW’s comps and earnings in the third quarter but much of its core business performed in-line with expectations. Sales were up 1.7% to $708.3m, while comparable sales dropped 0.4%. Earnings slumped to $4.04m from $38.96m a year earlier. Reported gross profit narrowed 120 basis points due to the company’s market share initiative, higher shipping expenses and costs related to the integration of Ebuys.
Urban Outfitters revealed mixed results for its third-quarter, achieving record sales but reporting a fall in earnings. Net profit dropped to US$45.1m from $47.3m a year earlier, while gross margin narrowed 142 basis points to 33.4% primarily driven by deleverage in delivery and logistics expense due to increased penetration of the direct-to-consumer channel, higher international penetration and increased furniture penetration. Total sales grew 3.5% to a record $893m, while comparable retail sales edged up 1%.
Richard Johnson, CEO of US athletic wear retailer Foot Locker, said the company’s third quarter was broadly in line with expectations as both earnings and revenue slipped. For the period ended 28 October, net income fell to US$102m from $157m in the year-ago quarter. Total sales meanwhile, fell 0.8% to $1.87bn compared to $1.89bn last year, while comparable-store sales decreased 3.7%. Gross margin narrowed to 31% from 33.9%
Abercrombie & Fitch
Fran Horowitz, CEO of US teen apparel retailer Abercrombie & Fitch, said the company is pleased by the clear progress across all brands in the third quarter. For the period ended 28 October, net income totalled $10.1m, compared to $7.9m in the year-ago period. The gross profit rate was 61.3%, 80 basis points lower than last year. Net sales meanwhile, reached US$859.1m, up 5% over last year, with comparable sales up 4%. By brand, Hollister sales increased 10% to $508.1m and decreased 2% to $351m for Abercrombie over last year. By geography, net sales increased 4% to $554.7m in the US and were up 5% to $304.4m in international markets over last year.
The Bon-Ton Stores
US department store retailer The Bon-Ton Stores widened its net loss to US$44.9m in the third quarter, from $31.16m in the year-ago period. The York, Pennsylvania-based company saw total sales fall 7.6% to $545.3m, against $589.9m in last year’s quarter. Comparable store sales decreased 6.6% year-on-year. Gross margin fell 200 basis points to 33.1% compared to last year, mainly due to an increase in the markdown rate. CEO William Tracy said while results in the third quarter fell short of expectations, the company is taking “more aggressive” actions to improve its performance as well as strengthen its financial position.
Ross Stores CEO Barbara Rentler said the company’s earnings outperformed its expectations in the third quarter, despite being up against “our toughest prior year comparisons and two major hurricanes”. Net earnings grew to $274m, up from $245m in the prior year. Total sales were up 8% to $3.3bn, while comparable store sales rose 4%.
Shoe Carnival CEO Cliff Sifford said the company is “very pleased” with its third-quarter results as net revenues rose 4.7% to US$287.5m, compared to $274.5m last year. Comparable store sales increased 4.4%, while net income totalled $10.7m, compared to $9.7m in the year-ago period. Gross profit margin decreased 0.1% to 29.8% compared to 29.9% in the third quarter of fiscal 2016. Sifford added the company has raised its fiscal year outlook and now expects earnings per diluted share to be in the range of $1.42 to $1.49.
US retail giant Walmart has raised its annual profit outlook after delivering third-quarter results that beat expectations. Total revenue was up 4.2% to US$123.2bn, thanks to US comparable sales growth of 2.7% and an uptick in traffic of 1.5%. E-commerce growth remained strong, led by online growth. Net earnings amounted to $1.75bn from $3.03bn a year earlier. The company now expects full-year earnings in the range of $4.38 to $4.46 per share. It originally expected $4.30 to $4.40.
US department store retailer Target said it was “very pleased” with its third-quarter performance as efforts to turn around its business appear to be paying off. Sales increased 1.4% to US$16.7bn from $16.4bn last year, reflecting a 0.9% comparable sales increase combined with the benefit from sales in non-mature stores. Comparable digital channel sales grew 24% and contributed 0.8%. Net earnings meanwhile, slipped 21% to $480m from $608m in the year-ago period. Gross margin narrowed slightly to 29.7%, compared with 29.8% last year, reflecting pressure from digital fulfilment costs and the retailer’s efforts to improve pricing and promotions, partially offset by cost savings.
L Brands booked a mixed third-quarter as earnings slipped but sales edged up from last year. For the three months ended 28 October, net income fell to US$86m from $121.6m in the year-ago period. Net sales meanwhile, were up 1% to $2.62bn, compared to $2.58bn in the same quarter last year. Comparable sales fell 1%. L Brands noted its exit from the swim and apparel categories had a negative impact of about 2 percentage points to both total company and Victoria’s Secret comparable sales.
The Children’s Place
The Children’s Place reported what it said were ” exceptional” operating results in the third quarter with comparable retail sales, gross margin and earnings per diluted share all exceeding last year. Net sales increased 3.4% to $490m on the back of a comparable retail sales increase of 5.1%. Net income meanwhile, slipped slightly to $44.1m from $44.2m the previous year, while GAAP earnings per diluted share were up 3% to $2.44 from $2.36 last year.
Differential Brands Group, which owns the Robert Graham and Hudson Clothing brands, narrowed its net loss in the third quarter. For the three months ended 30 September, net loss was US$0.18m compared to $2.8m for the prior year period. Net sales meanwhile, were up 3% to $42.4m, reflecting a 1% increase in wholesale segment sales and a 5% increase in consumer direct segment sales. Total company gross margin was 42.6% compared to 38.1% in the third quarter of 2016.
Dick’s Sporting Goods
Retailer Dick’s Sporting Goods has raised its full-year guidance on the back of a 7.4% increase in net sales to US$1.94bn. Consolidated same store sales decreased 0.9%, compared to the company’s guidance of a low single-digit decrease, while e-commerce sales were up 16%. Net income in the quarter meanwhile, slipped to $36.9m from $48.9m last year.
TJX Companies has booked higher earnings and group sales in its third-quarter but the hurricanes had a negative effect on comparable store sales, which were flat for the period. Net sales were up 6% to $8.8bn, while gross margin grew 0.3 percentage points to 29.8% thanks to gains related to the company’s inventory hedges and an increase in merchandise margin, partially offset by higher supply chain costs and expense deleverage. Earnings reached $641.4m from $549.8m last year.
JC Penney CEO Marvin Ellison said the company took “aggressive actions” in the third quarter to clear slow-moving inventory, primarily allowing for an improved apparel assortment heading in to the holiday season. While these actions had a negative short-term impact on profitability in the third quarter, Ellison said the company firmly believe it was the right decision, despite booking a drop in sales and a widening of its net loss. For the period ended 28 October, net sales fell 1.8% to US$2.81bn, compared to $2.86bn last year. Net loss widened by 91% to $128m from $67m in the same period last year. JC Penney said the reduction was driven in large part by increased cost of goods sold, restructuring charges associated with the store closures and a charge related to settlement accounting on the company’s pension plan.
Nordstrom swung to a profit in the third quarter as net earnings reached US$114m, compared to a net loss of $10m in the year-ago period. For the quarter ended 28 October, net sales were also up, rising 2% to $3.54bn from $3.47bn last year. Comparable sales meanwhile, dropped 0.9% compared with the same quarter last year. Nordstrom said the estimated lost sales impact from the hurricanes was around $20 million, or 60 basis points.
Dillard’s said Hurricanes Harvey and Irma affected its two largest states, Texas and Florida, leading to a sales decline in third quarter. For the 13 weeks ended 28 October, net sales slipped 1% to US$1.36bn from $1.37bn last year. Reported net income for the period was also down, falling to $14.5m from $22.8m in the year-ago quarter.
Brand management company Sequential Brands said its third-quarter results were softer than expected, as it moved to a loss in the quarter. For the three months ended 30 September, on a GAAP basis, net loss totalled US$24.2m, compared to net income of $1.3m last year. The company said it incurred non-cash impairment charges of $36.5m related to the trademarks of five of its non-core brands during the quarter. Meanwhile, total revenue for the period slipped 7.14% to $39m from $42m in the prior-year quarter.
US department store retailer Kohl’s saw earnings fall in the third quarter with net income in the period slipping to US$117m, compared to $146m last year. Gross margin narrowed 30 basis points to 36.8% from 37.1%, while net sales were flat at $4.33bn. Comparable sales meanwhile, were up 0.1%. CEO Kevin Mansell said the company saw strong results during the back-to-school season but added the middle of the quarter was soft as it experienced disruptions from the hurricanes and other unseasonal weather.
US department store retailer Macy’s said overall, it is pleased with the results for the third quarter and remains on track to meet its full-year sales and earnings guidance. Net income attributable to Macy’s shareholders in the period reached US$36m, compared to $17m last year, while gross margin was flat at 39.9% compared to 39.8% in the year-ago quarter. Sales meanwhile, slipped 6.1% to $5.28bn, compared to $5.63bn last year. Macy’s said the year-over-year decline reflects, in part, the closure of stores previously announced by the company. Comparable sales on an owned basis were down 4%.
Wolverine Worldwide said the 13 weeks to 30 September marked the third consecutive quarter of “strong results” for the company, despite a drop in both earnings and revenue in the period. Net earnings fell 52.7% in the quarter, falling from US$48.2m to $22.8m. Reported revenue meanwhile, slipped 3.7% to $581.3m, compared to $603.7m last year. Reported gross margin was 39.7%, compared to 39.3% in the prior year. CEO Blake Krueger said the company continues to make “excellent progress” on its business-wide transformation; the Wolverine War Forward Plan.
US footwear and accessories specialist Steve Madden recorded what it called “solid” sales and EPS growth in the quarter despite a “challenging retail environment”, led by a strong performance across its Steve Madden wholesale footwear businesses, including Steve Madden Women’s, Men’s and Kids’ as well as Madden Girl. For the three months ended 30 September, net income increased to US$44.2m from $43.8m in the year-ago period. Net sales were also up, rising 8% to $441.2m, compared to $408.4m last year. Gross margin was 37.6% as compared to 37.8% in the same period last year, a decrease of 20 basis points. CEO Edward Rosenfeld said that as the company looks ahead, it expects to continue to face industry headwinds, and as a result, is planning its business “prudently”.
While Under Armour’s international business continues to deliver against the company’s ambition of building a global brand, operational challenges and lower demand in North America resulted in third-quarter revenue below company expectations, falling 5% to US$1.4bn. North America sales fell 12%, while international sales jumped 35%. The EMEA, Asia-Pacific and Latin America all recorded increases, of 22%, 52% and 27%, respectively. Apparel revenues, meanwhile, were down 8%, and footwear revenues up 2%. Accessories sales edged up 1%. Gross margin declined160 basis points to 45.9%, while earnings dropped 3.9% to $54.2m. Consequently, Under Armour lowered its full-year outlook and now expects revenues to be up at a low single-digit percentage rate, gross margin to be down around 220 basis points, and operating income to be around $0m-$10m.
Carter’s achieved its third-quarter sales and earnings objectives, despite the “significant impact” of hurricanes in Texas, Florida, and Puerto Rico, with growth led by the company’s US retail and international businesses, including the contribution from the Skip Hop brand which was acquired earlier this year. For the period ended 30 September, net sales increased 5.2% to US$948.2m. Net income was also up, rising 2.1% to $82.5m from $80.8m in the year-ago quarter. Carter’s also announced the acquisition of its licensee in Mexico, an investment which CEO Michael Casey believes will strengthen its leading market position in North America. “Given the strength of our fall and holiday product offerings, together with the contribution of our new opportunities with Skip Hop, Amazon, China, and Mexico, we believe we are on track to achieve our growth objectives this year, our 29th consecutive year of sales growth,” he adds.
Weyco booked a mixed third-quarter as revenue slipped but net earnings attributable to the company jumped 7% to US$4.9m, compared to $4.6m in the year-ago period. Net sales for the quarter ended 30 September fell 3% to $76.9m from $79.1m last year. “While the changing retail environment continues to impact our top-line sales growth, we are pleased to announce a bottom line earnings increase for the quarter,” said CEO Thomas Florsheim. “This earnings increase reflects our ongoing efforts to improve gross margins and control costs in our wholesale business.”
Columbia Sportswear CEO Tim Boyle said the company is pleased to report better than expected third-quarter results, despite a sales jump of less than 1% to US$747.4m in the period ended 30 September. Net income meanwhile, increased 5% to $87.7m from $83.6m last year. Global apparel, accessories and equipment net sales were up 1% to $580m, while global footwear net sales decreased 2% $167.4m. Boyle added: “While our US business adapts to ongoing structural changes, our improved profitability outside the US illustrates the strength of our global business model.”
JC Penney is expecting an improvement in third-quarter sales thanks to the implementation of a re-set in women’s apparel, which expanded its casual and contemporary offering. For the period, the retailer is now expecting comparable store sales to increase in the range of 0.6% to 0.8% and cost of goods sold, excluding depreciation and amortization, will increase 300 to 320 basis points compared to the same period last year, impacted primarily by a greater sales penetration in major appliances and e-commerce and the decision to accelerate the liquidation of inventory. The company expects third-quarter adjusted earnings per share to be in the range of ($0.45) to ($0.40). For the full year, JC Penney is expecting comparable store sales of -1% to 0%.
Amazon saw both earnings and sales grow in its third-quarter thanks to its acquisition of Whole Foods. Net income edged up to US$256m from $252m a year earlier, while sales climbed 34% to $43.7bn. Revenues included around $1.3bn of sales from the Whole Foods acquisition, but even excluding this, sales were still up by an above average 29.8%. Amazon managed to increase the pace of growth from its online stores, where sales increased by 22% over the prior year. This is the highest rate of growth since the second quarter of 2016.
Rocky Brands booked a mixed third-quarter as earnings jumped but revenues slipped with wholesale sales below expectations as each of its brands posted modest shortfalls versus plan, due to lower discounting. For the three months ended 30 September, net earnings amounted to $2.23bn compared to $445.6m last year. Net sales however, fell 11.7% to $64.7m from $73.2m in the year-ago period. Gross margin in the period widened to 30.2% compared to 27% last year. Rocky Brands said the 320 basis point increase was driven by a significant improvement in both wholesale segment and military segment margins. The company added about US$1.7m of military footwear shipments shifted from the third quarter to the fourth quarter due to the temporary shutdown of the company’s Puerto Rico facility in the wake of Hurricane Maria.
US apparel giant VF Corporation posted “strong” third-quarter results, fuelled by accelerated momentum across the company’s international and direct-to-consumer platforms and its outdoor and action sports and workwear businesses. However, net income fell 23% to US$386.1m in the three months to September, from $498.5m the year before. Gross margin improved 100 basis points to 50.1%, while total revenues increased 5% to $3.5bn, compared to $3.3bn last year. Brand revenue at Vans was up 28%, but fell by 2% and 1% at The North Face and Timberland respectively. International revenue meanwhile, increased 13%, including 18% growth in Europe, and 9% growth in China. For fiscal 2017, VF Corp is forecasting revenue to increase at about 6% to about $12.1bn.
Third quarter net sales of US$1.1bn, up 16.2% on last year, set a new quarterly record for Skechers, surpassing its previous record in the first quarter earlier this year by $22m, and resulted in a new nine-month record with sales exceeding $3bn. This was the result of a 25.7% increase in the company’s international wholesale business, a 1.4% increase in its domestic wholesale business, and an 18.6% increase in its company-owned global retail business, which included comparable same-store sales increases of 4.4%. Net earnings jumped 41.8% to $92.3m, compared to $65.1m in the year-ago period, while gross margin was 47.5% from 45.6% last year.
Levi Strauss & Co
Jeans giant Levi Strauss & Co saw net income decline 10.5% in the third quarter to US$88m, compared to $98.3m in the year ago-period, reflecting foreign exchange losses. Net revenue meanwhile, grew 7% to $1.27bn from $1.19bn last year. In Europe, net revenues were up by 20%, while in the Americas and Asia sales grew by 2%. Gross margin expanded 180 basis points to 51.8%, reflecting the margin benefit from revenue growth in the direct-to-consumer channel and international business. The San Francisco-based company raised its revenue growth guidance for the full year to 5%-6% in constant currency.