In the latest fourth-quarter filings from US apparel and footwear brands and retailers, Destination Maternity narrowed its net loss, Sears was boosted by the new US tax law, Caleres returned to profit, Dick’s Sporting Goods achieved growth across key businesses, and Urban Outfitters produced record fourth-quarter sales.
Boot Barn Holdings
Investment in merchandising, marketing and omni-channel fuelled double-digit gains in retail comparable sales for Boot Barn Holdings in the fourth quarter. Earnings reached US$6.9m from $2.6m a year earlier. Gross margin widened to 31% from 30.3% last year, while net sales reached $170.8m, driven by a 12.1% increase in same store sales, with double-digit same store sales growth in both retail stores and online. This compares to $163m in the prior-year period.
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Destination Maternity
US retailer Destination Maternity has admitted there is much work to be done to return the company to profitability, but narrowed its net loss in its fourth quarter and full-year. For the 3 months ended 2 February, losses amounted to US$10.1m from $32.8m a year earlier. Gross margin was down 60 basis points to 50.4%, while net sales were up 4.9% to $105.1m. Comparable sales increased 5.2%. For the full year, losses narrowed to $21.6m from $32.8, while net sales dropped 6.3% to $406.2m. Comparable sales fell 1.5%.
Vince Holding
Vince Holding CEO Brendan Hoffman said the company is pleased with its results in the fourth quarter, which reflect what he calls the “significant progress” it has made toward regaining market share. For the period ended3 February, net income was US$74.5m compared to a net loss of $162.1m in the prior-year period. The net income for the fourth quarter of fiscal 2017 includes a Tax Receivable Agreement (TRA) adjustment of $82m related to lower federal tax rates due to the new Tax Cuts and Jobs Act. Net sales, meanwhile, increased 16.9% to $74.6m, including $1.6m in sales from the 14th week, compared to $63.9m in the fourth quarter of fiscal 2016. Gross margin narrowed slightly to 45.5% from 45.7% in the year-ago period, largely due to a mix shift in the wholesale channel and an unfavourable adjustment to inventory reserves, partially offset by lower supply chain costs and a favourable adjustment to reserves related to the cost of executing the company’s wholesale distribution strategy.
Differential Brands Group
Differential Brands Group, which owns the Robert Graham and Hudson Clothing brands, moved to a profit in the fourth quarter with net income totalling US$4.1m in the period, compared to a net loss of $4.9m last year. Net sales, meanwhile, increased 7% to $45.1m in the quarter, reflecting a 6% increase in wholesale segment sales and an 8% increase in consumer direct segment sales. Total company gross margin was 41.9% compared to 39.9% in the fourth quarter of 2016 as a result of better initial margins across all brands.
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The Finish Line
While Finish Line anticipated its business would be under pressure during the fourth quarter due to a difficult selling environment for athletic footwear, sales ended up being down more than forecast, according to CEO Sam Sato. Net income in the period totalled US$16.3m, compared to a net loss of $9.5m in the year-ago quarter. Consolidated net sales, meanwhile, were $561.3m, an increase of 0.7% over the prior year period. Finish Line’s sales decreased by 0.9%. Comparable sales were down by 7.9% compared to company expectations of a 3%-5% decrease in the quarter. Finish Line Macy’s sales increased 8.5%.
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By GlobalDataPVH Corp
PVH CEO Emanuel Chirico said the company’s fourth-quarter results exceeded its expectations and were ahead of the firm’s long-term targets thanks to strong momentum in its Tommy Hilfiger and Calvin Klein businesses. Net income in the quarter ended 4 February jumped to US$108.5m from $100.7m a year earlier, while net sales were up 19% to $2.4bn, compared to $2bn in the prior year period. PVH said it recorded a one-time net tax benefit of $53m in the fourth quarter as a result of the US Tax Tax Cuts and Jobs Act of 2017. The Company projects that 2018 earnings per share on a GAAP basis will be in a range of $8.76 to $8.86 compared to $6.84 in 2017, while revenue in 2018 is projected to increase by about 7%.
J Crew
“Meaningful change” is already taking place at J Crew, says CEO Jim Brett who claims the business is already seeing results in its most important business – women’s apparel – in a move he says signals its strategy is working. For the fourth quarter of fiscal 2017, net income totalled US$36.6m compared to $1.1m in the year-ago period. J Crew said the fourth quarter this year includes a benefit for income taxes of $64.8m. Gross margin in the period increased to 36.6% from 34.7% last year. Total revenues, meanwhile, increased 2% to $710.6m, which includes $28.6m generated in the 14th week. Comparable company sales decreased 3% following a decrease of 5% in the fourth quarter last year.
Shoe Carnival
2017 was a transitional year for Shoe Carnival, as the company refined its strategic direction in a bid to create a better experience for customers. For the 14 weeks to 3 February, net loss widened to US$3.9m from $920,000 in the year-ago period. Shoe Carnival noted this year’s figure included non-cash impairment charges of $3.4m for 30 underperforming stores, $6.3m of additional expense associated with the enactment of the US Tax Cuts and Jobs Act of 2017 in December 2017 and a $3.3m gain on insurance proceeds related to hurricane affected stores. Gross profit margin was 28.9% for the period – including the $3.3m insurance proceeds gain. Net sales, meanwhile, increased $9m, or 3.9%, to $243.2m. Comparable store sales decreased 0.5%
Francesca’s Holdings Corp
Steve Lawrence, president and CEO of Francesca’s Holdings Corporation, said while 2017 was a “challenging year” for company, it was also a year where it put in place a number of strategic investments that it believes will serve as building blocks for its future. For the 14 weeks ended 3 February, net income slipped to US$3.7m from $14.6m in the year-ago period. The business said excluding the remeasurement of net deferred tax assets, adjusted net income was $7.1m. Net sales, meanwhile, decreased 5% to $138.5m from $146.3m in the comparable prior-year quarter. Francesca’s said the decline was due to a 15% decrease in comparable sales compared to flat in the comparableprior-yearr quarter. It added the comp sales slip was primarily due to a decline in boutique conversion rate and traffic, as merchandise did not resonate with customers.
Destination XL
Destination Xl is off to a “good start” in fiscal 2018 as the firm ended the fourth quarter with what CEO David Levin called a “very strong” comp of 4.3%. However, earnings were down in the period as net loss totalled US$3.3m, compared to net income of $1.8m for the fourth quarter of fiscal 2016. Total sales, meanwhile, increased 10.5% to $135.5m from $122.6m for the 13-week fourth quarter of fiscal 2016. The increase of $12.9m in total sales was primarily driven by sales from the 53rd week of $6.9m and a comparable sales increase of $5.3m, or 4.3%. Gross margin, inclusive of occupancy costs, was 45%, compared to 44.9% last year. The increase of 10 basis points was the result of a 90 basis-point decrease in occupancy costs as a percentage of total sales partially offset by a decrease in merchandise margin of 80 basis points.
The company has also announced Levin will retire from his position by the end of the year. The board has engaged Heidrick & Struggles International to lead the search for a successor which is expected to be completed by the end of the current fiscal year.
G-III Apparel
Morris Goldfarb, CEO of G-III Apparel, says he is pleased to have finished with better results than last year, particularly as a result of the group’s power brands. For the period ended 31 January, the company reported a GAAP net loss of US$542m, compared to a net loss of $20.1m in the fourth quarter of last year. The firm noted it incurred income tax charges of $7.5m related to the one-time effect of the enactment of the Tax Cuts and Jobs Act in the fourth quarter 2018. Net sales meanwhile, increased by 18.5% to $714.9m from $603.3m in the fourth quarter last year. This includes net sales of about $85m from the company’s DKNY and Donna Karan products. The company added the remainder of the year-over-year increase in net sales in the period reflects strength in its wholesale business, including new product launches. However, these increases were partially offset by declines in net sales of the company’s legacy retail businesses.
Lands’ End
Lands’ End CEO, Jerome Griffith, said the company is pleased with its strong performance in the fourth quarter which saw the firm end the year on a solid note. Net income in the period ended 2 February amounted to US$39.8m, compared to a net loss of $94.8m in the year-ago period. Lands’ End said it recorded a tax benefit during the quarter of $21.9m, primarily due to the U.S. Tax Cuts and Jobs Act. Net revenues, meanwhile, climbed 11.3% to $510.6m – including $25.9m from the 53rd week – compared to $458.8m in the fourth quarter last year. Direct segment sales increased 14.3% to $455.6m, but retail segment sales dropped 8.7% to $55.1m, primarily due to fewer Lands’ End Shops at Sears. Same store sales on a comparable 13-week basis increased 5%, while gross margin was 38.9% as compared to 38.6% in the fourth quarter last year.
Guess
Fashion retailer Guess Inc reported a mixed fourth quarter as earnings slipped but sales climbed. For the three months ended 3 February, the company recorded GAAP net earnings of US$1.04m, an 84.2% decrease from $6.6m in the year-ago period. GAAP diluted earnings per share decreased 87.5% to $0.01 from $0.08 in the prior-year quarter. Total net revenue, meanwhile, climbed 17.5% to $792.2m, compared to $674m in the prior-year quarter. In constant currency, net revenue increased by 10.2%. Sales in Europe and Asia were up 39.7% and 40.2%, respectively, while in the Americas sales were down 6.1%. GAAP operating margin increased 550 basis points to 8.6%, compared to 3.1% in the prior-year quarter, driven primarily by lower asset impairment charges. The positive impact of currency on operating margin for the quarter was roughly 80 basis points.
The Children’s Place
Jane Elfers, CEO of children’s speciality apparel retailer The Children’s Place, has hailed the firm’s fourth-quarter results as “outstanding” – despite moving to a net loss. Net sales increased 9.4% in the period to US$570m from $520.8m last year, while comparable retail sales were up 8.2%.
Iconix Brand Group
Iconix moved to a profit in its fourth-quarter as net income totalled US$24.7m, compared to a net loss of $293.9m in the year-ago period. The firm said it was subject to a $66.8m income tax benefit in the period related to the reduced US corporate tax rate signed into law in December and the company’s ability to reduce its valuation allowance on deferred tax assets from the third quarter, which generated a large benefit on its pretax loss. For the fourth quarter ended 31 December, operating income declined 33% to $12.6m, while licensing revenue fell 11% to $52.3m.
Genesco
Genesco booked a rise in both earnings and revenue during its fourth-quarter. Net income in the period rose 20% to US$56m, compared to $46.5m last year, while net sales increased 5% to $930m from $883m. Consolidated comparable sales, including same store sales and comparable e-commerce and catalogue sales, edged up 1% with an 11% increase in the Journeys Group, a 1% increase in the Schuh Group, a 14% decrease in the Lids Sports Group, and a 4% increase in the Johnston & Murphy Group. Comparable sales included a 1% decrease in same store sales and a 15% increase in e-commerce sales.
Sears
Sears booked net income of US$182m in the fourth quarter, compared to a net loss of $607m for the year-ago period – helped by a benefit of about $470m related to US tax reform. This quarter included a non-cash accounting charge of $72m related to the impairment of the Sears trade name, while the prior-year period included a charge of $381m related to the same. Sears generated total revenues of $4.4bn for the fourth quarter, compared with total revenues of $6.1bn a year ago, with store closures contributing to over half of the decline. Comparable sales fell 18.1% at Sears, and 12.2% at Kmart, for a company-wide decline of 15.6%.
Zumiez
Zumiez CEO Rick Brooks said the firm concluded 2017 with strong fourth quarter comparable sales performance which came on top of a successful holiday selling period in the prior year period. For the three months to 3 February, net income totalled US$19.9m, compared to $18.2m last year. Total net sales meanwhile, increased 16.9% to $308.2m from $263.6m in the year-ago quarter. Comparable sales for the 14-week period increased 7.5% compared to the same 14-week period last year.
Caleres
Footwear retailer Caleres booked an increase in both profit and revenue during the fourth quarter. For the 14 weeks to 3 February, net earnings amounted to US$20.3m, compared to a net loss of $6.6m in the year-ago period. Gross margin of 41.8% was up 97 basis points, while net sales were up 9.8% to $702.5m from $7639.5m in the prior year. Famous Footwear total sales of $393.1m were up 7%, while same-store-sales were up 2.8% on a 13-week basis. Brand portfolio sales meanwhile, rose 13.8% to $309.4m, including a contribution from Allen Edmonds, which was acquired in December of 2016.
Dick’s Sporting Goods
Fourth-quarter results at retailer Dick’s Sporting Goods were in line with expectations, with growth achieved across key businesses despite a competitive environment. For the period ended 3 February, consolidated net income totalled US$116m, a 28.6% increase on $90.2m in the year-ago period. Net sales, meanwhile, increased 7.3% to $2.66bn, compared to $2.48bn last year, while consolidated same-store sales slipped 2% on a comparative basis.
DSW
DSW has announced the exit of Ebuys, following the completion of its strategic evaluation. The company expects to complete the liquidation process in early 2018. The news comes as the company reports its fourth-quarter financial results for the 14 weeks to 3 February. For the period, DSW said sales increased 6.7% to US$720m, including $35.6m from the extra week on last year. For the 13-week period, comparable sales increased 1.3% compared to last year’s 7% decrease. Reported net income, meanwhile, was $11.7m which included net after-tax charges of $18.8m, excluding costs related to Ebuys, restructuring, acquisition expenses related to Town Shoes and the impact of US Tax Reform. This compares to reported net income of $30.5m in the year-ago period.
Tilly’s
Tilly’s booked increases in both earnings and revenue in its fourth-quarter, as net income climbed to US$6.7m from $6.3m in the year-ago quarter. For the period ended 3 February, net sales were up 2.6% to $164.3m, compared to $160.2m last year, despite ending the quarter with four fewer stores than a year ago.Comparable store sales, which includes e-commerce sales, were flat compared to a 0.1% increase in the fourth quarter last year. Gross margin, meanwhile,increased to 31.3% from 30.6% last year. Tilly”s said the 70 basis point increase was attributable to a 90 basis point reduction in occupancy costs, partially offset by a 20 basis point decrease in product margins.
Burlington Stores
Burlington Stores CEO Tom Kingsbury said the firm reported “strong” fourth quarter results which saw both sales and earnings climb. On a GAAP 14 week basis, net income increased 92% over the prior year period to US$241.7m, compared to $125.6m last year. Total sales for the 14 weeks increased 14.9% over the prior year period to $1.94bn, compared to $1.69bn in the year-ago quarter. For the first quarter of fiscal 2018, the company expects total sales to increase in the range of 9.5% to 10.5%, and comparable store sales to increase in the range of 2% to 3%.
Stage Stores
Stage Stores moved to a profit in the fourth quarter as net income reached US$5.6m, compared to a net loss of $6.8m last year. Net sales, meanwhile, were up 20.9% to $549m from $454m in the year-ago period, while comparable sales increased 1.1% compared to a decline of 8.5% last year. Fourth quarter merchandise margin was up 140 basis points. The company said results for the fourth quarter 2017 reflect 14 weeks versus 13 weeks in 2016, except that comparable sales were measured over 13 weeks for both periods.
American Eagle Outfitters
American Eagle Outfitters CEO Jay Schottenstein said he is pleased that the company ended 2017 with a strong quarter, achieving record sales and an EPS increase over last year. For the period ended 28 January, total net revenue increased 12% to US$1.23bn, compared to $1.1bn in the year-ago quarter. Consolidated comparable sales for the 14 weeks increased 8% over the comparable period last year, while gross margin rate decreased 80 basis points to 34.6% of revenue compared to 35.4% last year. The reduction in margin rate reflects higher promotional activity. Additionally, increased shipping costs and higher compensation were offset by rent leverage. Net income meanwhile, jumped 72% to $94m from $54.6m last year.
Abercrombie & Fitch
Fran Horowitz, CEO of US teen apparel retailer Abercrombie & Fitch, said the company is pleased with its performance in the fourth quarter as net income attributable to the firm totalled US$74.2m, compared to $48.8m last year. The gross profit rate was 58.4%, down 90 basis points from last year, driven by higher average unit cost and lower average unit retail. Meanwhile, net sales increased 15% to $1.19bn and comparable sales by 9%. The additional week in fiscal 2017 and changes in foreign currency exchange rates benefited fourth-quarter net sales by about 4% and 3%, respectively. By brand, net sales increased 19% to $709.2m for Hollister and were up 9% to $484m for Abercrombie from last year. By geography, net sales climbed 13% to $774.6m in the US and by 20% to $418.6m in international markets from last year.
In addition, the retailer said that while it plans to open 21 full-price stores in fiscal 2018, including 11 in the US and 10 in international markets, it anticipates closing up to 60 stores in the US during the fiscal year through natural lease expirations.
Urban Outfitters
Urban Outfitters CEO Richard Hayne said the company produced record fourth-quarter sales, primarily driven by positive comp sales at all three of its brands. For the three months ended 31 January, net sales increased 5.7% over the same period last year to a record US$1.09bn. Comparable retail segment net sales increased 4%, driven by strong, double-digit growth in the digital channel partially offset by negative retail store sales. By brand, comparable retail segment net sales increased 8% at Free People, 5% at the Anthropologie Group and 2% at Urban Outfitters. Wholesale segment net sales increased 6.3%. However, net income in the period fell to $1.3m, compared with $64.3m last year as the company incurred a one-time charge on its foreign earnings and profits as well as a writedown of certain net deferred tax assets in relation to the Tax Cuts and Jobs Act to the tune of about $64.7m.
Meanwhile, Hayne added positive customer reaction to the new spring fashion offerings at all brands has been strong and makes the firm optimistic regarding the first half of the year.
Ross Stores
Ross Stores CEO Barbara Rentler said the company’s sales and earnings were “well ahead” of its expectations for the fourth quarter. Reported earnings per share for the 14 weeks ended 3 February were US$1.19, up from $.77 in the same period last year, while net earnings were $451m, compared to $301m last year. Sales for the fourth quarter were up 16% to $4.1bn, while comparable store sales for the period rose 5% versus a 4% gain for the same period in the prior year.
Weyco Group
Efforts to control costs and improve gross margins helped boost earnings in Weyco’s wholesale business, CEO Thomas Florsheim said. For the fourth quarter, sales fell 2% to US$80.3m, but gross margin widened to 37.4% from 34.7% last year. Earnings reached $8.1m, a drop of 1.2% on the prior year due to the change in the corporate tax rate. In the North America wholesale segment, however, earnings jumped 38% to $8.3m. For the year ahead, the company says its focus is on continuing to invest and grow its brands.
Target Corp
US department store retailer Target said its fourth-quarter results demonstrate the power of the “significant investments” it has made throughout 2017. Net earnings in the period were up 34.7% to US$1.1bn from $817m in the year-ago quarter. Gross margin, meanwhile narrowed slightly to 26.2% from 26.6% in 2016, reflecting pressure from digital fulfilments costs. Net sales increased 10% to $22.8bn from $20.7bn last year, reflecting the impact of an additional week in this year’s fourth-quarter, a 3.6% increase in comparable sales, and sales in non-mature stores. Comparable digital channel sales grew 29% and contributed 1.8 percentage points of comparable sales growth.
Footlocker
The dramatic shifts influencing the expectations and behaviours of customers continued to affect US footwear retailer Footlocker in the fourth quarter. The company reported a net loss of US$49m, or $0.40 per share, for the 14 weeks ended 3 February, 2018, compared to net income of $189m, or $1.42 per share in the same period of fiscal 2016. With the benefit of the extra week, total fourth-quarter sales increased 4.6% to $2.2bn this year, compared to sales of $2.1bn in the prior-year fourth quarter. Gross margin rate decreased to 31.4% from 33.7% a year ago, reflecting the continuation of a highly promotional marketplace environment.
Kohl’s
Kevin Mansell, CEO of US department store retailer Kohl’s said he is “very pleased” with the firm’s fourth-quarter results, which saw net income rise to US$468m, compared to $252m in the year-ago period. Reported diluted EPS was up 95% to $2.81 from $1.44 last year, while diluted EPS excluding tax reform and store closures was $1.99, compared to $1.44 in the year-ago quarter. Gross margin widened 43 basis points to 33.8% from 33.4%, while total sales were up 9.2% to $6.8bn from $6.2bn last year. Comparable sales meanwhile, increased 6.3%.
The Children’s Place
Jane Elfers, CEO of children’s speciality apparel retailer The Children’s Place, has hailed the firm’s comparable retail sales as “outstanding” in the first nine weeks of the fourth quarter. As a result of the 8.5% increase, the company has increased its guidance for the period. It now expects adjusted diluted EPS to be in the range of $2.45 and $2.50 for the fourth quarter, compared to the company’s previous guidance for adjusted diluted EPS of $2.07 to $2.12. This guidance assumes a comparable retail sales increase of about 7.5% to 8.5% for the quarter compared to a 6.9% increase in the fourth quarter of 2016 and previous guidance of a low single-digit increase.
Nordstrom
Nordstrom booked a 24.9% drop in net income in the fourth quarter as charges in the period took their toll. For the quarter ended 3 February, the firm reported net earnings of US$151m, compared to $201m in the year-ago period. Nordstrom said earnings in the quarter included a $42m charge related to corporate tax reform, including a one-time, non-cash charge of $51m related to the revaluation of its deferred tax assets, partially offset by cash tax savings from a lower federal tax rate. Total company net sales of $4.6bn, meanwhile, increased 8.4%, inclusive of about $220m from the 53rd week, compared with net sales of $4.2bn during the same period last year. Comparable sales for the fourth quarter increased 2.6%, while gross margin decreased 42 basis points to 35.6% from 36% in the year-ago period, primarily due to higher occupancy expenses related to new store growth for Nordstrom Rack, Canada and the New York City Men’s flagship.
TJX Companies
TJX Companies has achieved above-plan fourth-quarter comp sales growth and exceeded its EPS expectations in the period ended 3 February. Net sales for the 14-weeks increased 16% to US$11bn from $9.5bn in the year-ago period. Consolidated comparable store sales on a 13-week basis increased 4%, compared to last year’s 3% increase, while net income reached $877.3m, compared to $677.9m. Diluted earnings per share were $1.37, compared to $1.03 last year, while gross profit margin was up 0.1 percentage point to 28.4% versus the prior year.
L Brands
For the 14-week fourth quarter ended 3 February, L Brands said reported net income was up 5.1% to US$664.1m from $631.8m last year. The firm noted reportedresults include a pre-tax charge of $45m related to a loss on the early extinguishment of debt, and a tax benefit of $92.2m related to new US tax legislation. Net sales meanwhile, increased 7.4% to $4.82bn, compared to $4.49bn in the year-ago period, while comparable sales were up 2% compared to last year. L Brands said the extra week in 2017 represented about $160m in sales. Looking ahead, the company said it currently expects 2018 full-year earnings per share to be between $2.95 and $3.25, including earnings per share between $0.15 and $0.20 in the first quarter.
Chico’s
Chico’s CEO Shelley Broader said the company’s fourth-quarter results exceeded expectations and demonstrate “clear progress” in its efforts to drive improved performance and value creation. For the fourteen weeks ended 3 February, net income jumped to US$28m from $13.5m last year. Chico’s added the results include the favourable impact of the Tax Cuts and Jobs Act of 2017 of about $10m after-tax, as well as the benefit of the 53rd week of about $4m after-tax.Gross margin expanded 220 basis points in the period to 37.7%, compared to 35.5% in the year-ago period. Net sales, meanwhile, were $587.8m, compared to $600.8m last year. Chico’ said the 2.2% decrease primarily reflects a comparable sales decline of 5.2% as well as a decrease in selling square footage in fiscal 2017, partially offset by the $29m benefit of the 53rdweek. The comparable sales decline consisted of lower average dollar sale and flat transaction count.
Carter’s
Carter’s hailed another year of “record” sales and earnings as the company reported “strong demand in all channels of distribution” during the fourth quarter. Net income in the period increased US$48.6m, or 55.8%, to $135.7m, compared to $87.1m last year. Consolidated net sales, meanwhile, jumped 10%, or $93.1m, to $1.03bn. Carter’s said the increase reflects growth in all business segments and contributions from the 2017 Skip Hop and Mexico licensee acquisitions. Skip Hop, a global lifestyle brand for families with young children, and the acquired business in Mexico contributed $32.9m and $8.8m respectively, to consolidated net sales in the period. ?
Macy’s
Macy’s CEO Jeff Gennette said the booked US department store retailer a “solid” fourth-quarter, including a strong performance in January. Net income attributable to Macy’s shareholders in the period reached US$1.33bn, compared to $475m last year, while gross margin widened slightly to 38.2% from 38.3% in the year-ago quarter. Sales meanwhile, reached $8.67bn, an increase of 1.8%, compared with sales of $8.5bn in the year-ago period. Comparable sales on an owned basis were up 1.3% in the quarter. For fiscal 2018, Macy’s expects comparable sales on both an owned and an owned plus licensed basis to be flat to up 1%, total sales to be down between 0.5%-2%, and adjusted earnings per diluted share to be between $3.55 and $3.75, excluding anticipated settlement charges related to the company’s defined benefit plans.
Rocky Brands
Rocky Brands CEO Jason Brooks has hailed a “very solid” fourth-quarter as net income totalled US$4.4m in the period, compared to a net loss of $0.6m last year.The firm said the fourth quarter of 2017 included an after-tax charge of $1.6m associated with the loss on the sale of the Creative Recreation brand. It also recognised a one-time income tax benefit of $3.2m in the period as a result of the recently enacted tax reform. Net sales, meanwhile, were flat at $67m. Gross margin in the period widened to 34.8% from 32.5% last year. The 230 basis point increase was driven by higher wholesale and military margins combined with a lower percentage of military sales which carry lower gross margins than wholesale and retail.
Walmart
Walmart CEO Doug McMillon said the world’s largest retailer has “good momentum” in the business with “solid sales growth” across Walmart US, Sam’s Club and international, as the company booked a 4.2% rise in net sales to US$135.15bn for the fourth quarter. US comparable sales increased 2.6% and comp traffic by 1.6% in the period, while e-commerce sales jumped 23%. Consolidated net income attributable to Walmart, meanwhile, slipped 42.1% to $2.18bn, compared to $3.76bn in the year-ago period.
Walmart said while it is analysing the accounting impact of the Tax Act, its analysis is currently incomplete. “As a result, we have recorded a provisional benefit of $207m for both the fourth quarter and full year,” it said. “We expect to complete our work within the allowed measurement period.”
VF Corp
US apparel giant VF Corporation posted “better than expected” fourth-quarter results as growth continues to accelerate across core dimensions of its portfolio. However, net loss totalled US$90.3m in the three months to December, compared to net income of $264.3m the year before. VF said the transitional impact of the Tax Act resulted in a provisional net charge of approximately $465m for the fourth quarter and full year 2017. Gross margin improved 130 basis points to a quarterly record high of 51.5%, while total revenues increased 20% to $3.6bn, compared to $3bn last year. Global brand revenue at Vans was up 37%, and by 8% and 11% at The North Face and Timberland respectively. VF’s outlook for the transition quarter ending 31 March, includes revenue to approximate $2.9bn, up 16%, and adjusted earnings per share to approximate $0.65, up 27%.
Columbia Sportswear
Columbia Sportswear booked what it said is record net sales of US$776m in the fourth quarter, an 8% increase on the same period last year. The firm also posted record gross margin of 47.9%, compared to 47.1% in the prior year. The firm did however, book a net loss of $7.1m for the period, compared to net income of $84.7m in the year-ago period, largely due to incremental income tax expense related to the Tax Cuts and Jobs Act.
President and CEO Tim Boyle said: “We are pleased to report better than expected fourth quarter results, including continued growth in Europe, North America, and with our distributor partners around the world. In 2017, we reported record net sales, gross margin, and operating income.”
Skechers USA
Casual footwear brand Skechers USA has moved to a loss in its fourth-quarter, despite booking record sales. In the three month period, net losses amounted to US$66.7m from earnings of $6.7m a year earlier. Gross margin widened to 46.6% from 45.9m. The company incurred expenses of $64.7m related to investment in growth. Sales hit a record $970.6m in the quarter, an increase of 27%, boosted by 40.2% sales growth in the firm’s international wholesale business, and 11.6% in its domestic wholesale business. Global retail sales also grew 25.8%. Comparable store sales in company-owned stores were up 12%.
Levi Strauss & Co
Jeans giant Levi Strauss & Co saw net income climb 20% in the fourth quarter to US$116m, compared to $96m in the year ago-period, reflecting higher EBIT and lower taxes due to additional net foreign tax credits as well as the favourable impact of foreign operations as compared to 2016. Net revenue, meanwhile, grew 13% to $1.47bn from $1.3bn last year. In Europe, net revenues were up by 28%, while in the Americas and Asia sales grew by 7% and 13% respectively. Gross margin expanded to 53.4% from 50.7%, reflecting the margin benefit from revenue growth in the direct-to-consumer channel and international business.
For the full year, the San Francisco-based company saw net income slip 3% to $281m from $291m year earlier, primarily due to a $23m loss on early extinguishment of debt as a result of debt refinancing activities this year. Net revenue, meanwhile, grew 8% to $4.9bn, compared to $4.6bn last year, while gross margin expanded to 52.3% from 51.2%, reflecting strong growth in international and retail revenues, favourable transaction impact of currency and sourcing savings.
Steve Madden
In a preliminary sales update, CEO of US footwear and accessories specialist Steve Madden, Edward Rosenfeld, said the company is pleased with its fourth-quarter results, with earnings per share expected to be at the high end of our guidance range. Net sales in the period reached US$364.4m, up 8.3% compared to the same quarter of 2016. Net sales for the wholesale division meanwhile, increased 10.6% to $278.2m or 2.5% to $257.9m excluding results from Schwartz & Benjamin. Retail net sales increased 1.5% to $86.2m, while retail comparable store sales for the fourth quarter of 2017 decreased 5.1%.
“Overall, 2017 was a strong year for Steve Madden,” Rosenfeld added. “We delivered robust sales and earnings growth driven by the outstanding performance of our flagship Steve Madden brand in the wholesale channel. We also took a number of steps to position the company for future growth, including the acquisition of Schwartz & Benjamin and the formation of new joint ventures in China and Taiwan. As we look ahead, we are confident that our strong brands and increasingly diversified business model position us to continue to drive top- and bottom-line gains for years to come.”
