In the latest fourth-quarter filings from US apparel and footwear brands and retailers, Boot Barn Holdings has posted a fall in both earnings and revenue, while VF Corp and PVH Corp have both reported a net loss. Elsewhere, Oxford Industries has booked its twelfth consecutive quarter of positive comparable sales, while G-III Apparel Group saw profit rise but revenue fall.
Boot Barn Holdings
Boot Barn Holdings has posted a fall in both earnings and revenue for the fourth fiscal quarter. For the three months to 28 March, net income totalled US$5.7m, compared to $8.7m in the prior-year period. Net sales decreased 2.1% to $188.6m from $192.8m last year, while consolidated same-store sales were down 4.7%, comprised of a decrease in retail store same-store sales of 7.1% and an increase in e-commerce sales of 7.5%. The company said net sales and same-store sales growth were solid during the first ten weeks of the quarter before declining significantly during the last three weeks as a result of the Covid-19 crisis. Gross profit margin narrowed to 30.7% from 32.9% in the prior-year. The 220 basis points decline was driven by 210 basis points of deleverage in buying and occupancy costs and a 10 basis point decline in merchandise margin rate. The deleverage in buying and occupancy costs was primarily a result of lower volume sales.
For the full fiscal year, net income increased to $47.9m from $39m, while net sales rose 8.8% to $845.6m. Consolidated same-store sales increased 5%, comprised of an increase in retail store same-store sales of 4.5%, and an increase in e-commerce sales of 7.4%. Gross profit margin widened slightly to 32.7% from 32.4% in the previous year.
Apparel giant VF Corp has reported a net loss of US$483.8m for the fourth-quarter ended 28 March. This compares to net income of $128.8m in the prior-year period. Revenue decreased 11%, or 10% in constant dollars, to $2.1bn driven by lower consumer demand as a result of the Covid-19 outbreak and related government actions and regulations. Gross margin, meanwhile, declined 150 basis points to 53.1%, primarily driven by elevated promotional activity to clear excess inventory, partially offset by favourable mix shift toward higher-margin businesses. On an adjusted basis, gross margin decreased 100 basis points to 53.9%.
For the full year, net income amounted to $679.5m, compared to $1.26bn in the prior year, while revenue increased 2%, or 4% in constant dollars, to $10.5bn. Excluding the impact of acquisitions and divestitures and on an adjusted basis, revenue increased 3%, driven by VF’s two largest brands, and its international and Direct-to-Consumer platforms. Gross margin increased 70 basis points to 55.3%, including favourable mix shift toward higher-margin businesses. On an adjusted basis, gross margin increased 70 basis points to 55.5%.
Apparel giant PVH Corp said net loss attributable to the company for the fourth-quarter ended 2 February, amounted to US$67.4m. This compares to net income of $158.7m in the prior-year period. The company’s fourth-quarter of 2019 results include the Gazal Corporation acquisition and its acquisition of the Tommy Hilfiger retail business in Central and Southeast Asia. Revenue in the period totalled $2.6bn, marking a rise of 5% on last year, or 6% on a constant currency basis. Revenue in the Tommy Hilfiger business increased 12% to $1.3bn, while sales at Calvin Klein were down 2% to $936m.
For the full year, net income attributable to the company was $417.3m, down from $746.4m in the previous year. Revenue increased 3% to $9.9bn, rising 5% on a constant currency basis. The group reported an 8% increase in the Tommy Hilfiger business compared to the prior year, while sales at Calvin Klein were down 2%.
PVH did not provide guidance for its first quarter and full-year 2020, noting: “Given the dynamic nature of the circumstances surrounding the pandemic, the company’s results could be impacted significantly in ways the company is not able to predict today.” It added, however, virus-related concerns, reduced travel, temporary store closures, and government-imposed restrictions have resulted in “sharply reduced” traffic and consumer spending trends and sales stoppages in its retail stores in virtually all key markets during the first quarter of 2020.
Iconix Brand Group
Iconix Brand Group CEO Bob Galvin said the company’s fourth-quarter results were “consistent with management’s expectations”. For the period ended 31 December, total revenue was US$43.2m, a 1% increase, compared to $42.7m in the fourth quarter of 2018. GAAP net income reflected a loss of $95m, compared to a loss of $69.1m a year ago. In the period, the firm recorded a non-cash trademark impairment charge of $65.6m, primarily related to the write-down in the Joe Boxer and Mudd trademarks in the women’s segment and Fieldcrest in home. In also recognised a non-cash investment impairment charge of $9.6m due to impairment of its investment in MG Icon; and an asset impairment charge of $1.8m related to the consolidation and partial sublease of its New York office space. Adjusted EBITDA margin was 51% as compared to 30% last year, primarily as a result of the company’s decrease in expenses.
For the twelve-month period, total revenue was $149m, a 21% decline, compared to $187.7m last time. GAAP net income, meanwhile, reflected a loss of $111.5m, compared to a loss of $100.5m in the prior year. Adjusted EBITDA margin widened to 55% from 40%.
Oxford Industries, Inc, saw fourth-quarter fiscal 2019 net sales decline to US$297.6m from $298.5m in the prior-year period. For the quarter ended 1 February, comparable sales increased 4% representing the company’s twelfth consecutive quarter of positive comparable sales. The increase in the direct to consumer channels was offset by a reduction in sales in Lanier Apparel. Net earnings, meanwhile, fell to $15.3m from $16.7m, while gross margin widened 80 basis points to 55.9% driven by gross margin improvement at Lilly Pulitzer. Adjusted gross margin in the fourth quarter of fiscal 2019 increased 90 basis points to 56.2%, compared to 55.3% in the fourth quarter of fiscal 2018.
For the full 2019 fiscal year, net sales increased to $1.12bn from $1.11bn in the prior year, including a 4% comparable sales increase. Net earnings amounted to $68.5m, compared to $66.3m in fiscal 2018. Gross margin for the full year was 57.4%, compared to 57.5% in fiscal 2018 on a GAAP basis, and 57.6% compared to 57.7% in fiscal 2018 on an adjusted basis.
Shoe Carnival has reported a 2.2% rise in net sales to US$239.9m for the fourth quarter ended 1 February. This compares to net sales of $234.7m last year. Comparable store sales increased by 3.2%. Net income totalled $3.5m, compared to $1.4m a year ago, while gross profit margin widened to 29.1% from 28.4% in the fourth quarter of fiscal 2018.
Net sales during fiscal 2019, meanwhile, increased $6.9m to a record $1.04bn. Comparable store sales for the year were up 1.9%. Net income amounted to $42.9m, compared to $38.1m in fiscal 2018. Included in fiscal 2019 earnings was a tax benefit in connection with the vesting of equity-based compensation of approximately $1.9m that was recorded in the first quarter. Gross profit margin for fiscal 2019 was 30.1%, compared to 30% in fiscal 2018.
G-III Apparel Group
G-III Apparel Group saw profit rise but revenue fall in the fourth quarter to 31 January. The company reported GAAP net income of US$25.3m in the period, compared to $24.1m in the fourth quarter last year. Net sales, meanwhile, decreased by 1.6% to $754.6m from $766.8m in the prior-year period.
Net sales for the fiscal year increased 2.7% to $3.16bn from $3.08bn in the prior year. The company reported GAAP net income for the fiscal year of $143.8m, compared to $138.1m in the prior year.
Guess CEO Carlos Alberini has hailed a “strong” fourth-quarter performance. “We closed the year with strong liquidity and a solid balance sheet, which positions us well to navigate through the current coronavirus crisis,” he said. For the fourth quarter ended 1 February, the company recorded GAAP net earnings of US$79.6m, up from $23.2m last year. Adjusted net earnings were $82.3m, compared to $58.2m for the fourth quarter of fiscal 2019. Total net revenue increased 0.6% to $842.3m from $837.1m in the same prior-year quarter. In constant currency, net revenue increased by 1.8%. Sales in the Americas decreased 4.1% in US dollars and 4.4% in constant currency, while sales in Asia tumbled decreased 27.7% in US dollars and 26.4% in constant currency. Meanwhile, in Europe, revenues increased 13.2% in US dollars and 15.8% in constant currency.
For the full fiscal year, GAAP net earnings increased to $96m from $14.1m the year before, while adjusted net earnings were $105m, compared to $80.4m last time. Total net revenue increased 2.6 to $2.68bn, compared to $2.61bn in the prior year. In constant currency, net revenue increased by 5.4%.
Tailored Brands, Inc
Tailored Brands reported an operating loss and lower sales for the fourth quarter as the company recorded charges associated with the sale of the Joseph Abboud trademark and related to cost savings, consulting, severance, and termination costs. On a GAAP basis, operating loss was US$35m, compared to operating income of $13.3m last year. On an adjusted basis, operating loss was $12.3m, compared to an operating loss of $4.3m last year. On a GAAP basis, gross margin decreased 450 basis points to 34.3%. Fourth-quarter 2019 pre-tax results from continuing operations include $22.7m of charges. On an adjusted basis, gross margin decreased 110 basis points to 36.2% primarily due to increased promotional activities, as well as deleveraging of occupancy costs. Net sales decreased 5.3% to $691m, primarily due to a decrease in comparable sales of 3% and last year’s favorable $17.6mn net sales adjustment related to the impact of changes made to the company’s loyalty programmes. On an adjusted basis, net sales decreased 3% primarily due to the decrease in comparable sales of 3%.
Lands’ End, Inc
Lands’ End has reported increases in both earnings and revenue for the 13-week fourth-quarter ended 31 January. Net revenue rose 9.4% to US$549.5m, compared to $502.3m last year, largely reflecting revenue from the American Airlines’ uniform launch and e-commerce growth of 7.2%. This was partially offset by 49 fewer Lands’ End Shops at Sears, which resulted in a net revenue decline from Sears operations of $21.5m. Excluding the impact from Sears operations, net revenue would have increased by 14.3%. Net income totalled $25.5m, compared to $16.2m in the fourth quarter of fiscal 2018. Gross margin, meanwhile, increased by about 90 basis points to 39.8% as compared to 38.9% in the fourth quarter last year primarily due to a more disciplined promotional strategy.
Net revenue for fiscal 2019 and fiscal 2018 was flat at $1.45bn. Excluding the net revenue decline from Sears operations of $75.3m, net revenue would have increased by 5.4%. US e-commerce revenue growth of 7.4%, while same-store sales for US company-operated stores increased by 6%. Net income was $19.3m, compared to $11.6m in fiscal 2018, while gross margin increased about 50 basis points to 42.9% compared to 42.4% in fiscal 2018.
The company has also struck a new partnership with Kohl’s to distribute Lands’ End through Kohls.com and to 150 retail doors, starting in autumn 2020.
The Children’s Place, Inc
The Children’s Place CEO, Jane Elfers, said fourth-quarter sales exceeded company expectations with its digital business representing 31% of total sales in the period. For the three months ended 1 February, net sales decreased 3.3% to US$513m from $530.6m last year, primarily as a result of a comparable retail sales decrease of 3.6%. Net income, meanwhile, was $24.2m, compared to net income of $12m in the prior-year period. Adjusted net income was $28m, compared to adjusted net income of $17.9m last year. Elfers added the company launched the Gymboree brand on 12 February and received a “very positive initial response” from the customer.
Net sales decreased 3.5% to $1.87bn for the 12-month period, primarily as a result of a comparable retail sales decrease of 2.7%. Net income was $73.3m, compared to net income of $101m in the prior year. Adjusted net income fell to $83.8m from $113.4m in the comparable period last year.
The Buckle, Inc
Nebraska-based denim specialist The Buckle has booked a 2.5% rise in net sales to US$271m for the 13-week fiscal quarter ended 1 February, compared to net sales of $264.4m in the prior-year period. Comparable store net sales increased by 3.3%, while online sales grew 7.5% to $36.4m, compared to $33.9m last year. Net income for the fourth quarter of fiscal 2019 was $47m, compared with $41.1m for the fourth quarter of fiscal 2018.
For the full year, net sales increased 1.7% to $900.3m from $885.5m the prior year. Comparable store net sales were up 2.2%, while online sales rose 6.9% to $110.8m. Net income for the fiscal year was $104.4m, compared with $95.6m last time.
Zumiez has booked a rise in both earnings and revenue for the fourth quarter ended 1 February. Total net sales increased by 7.9% in the period to US$328.8m from $304.6m last year. Fourth-quarter fiscal 2019 results include $2m in net sales related to the recognition of deferred revenue due to changes in the firm’s STASH loyalty programme estimated redemption rate. Comparable sales for the thirteen weeks rose 6.4% compared to a 3.9% increase a year ago. Net income, meanwhile, amounted to $37.9m, compared to $29.6m last time.
Total net sales for fiscal 2019 were up 5.7% to $1.03bn from $978.6m a year earlier. Comparable sales for the fifty-two week period increased 4.9%. Net income in fiscal 2019 increased 48% to $66.9m, compared to net income in the prior fiscal year of $45.2m.
Genesco said net sales for the fourth quarter of Fiscal 2020 were flat at US$678m, compared to the fourth quarter of Fiscal 2019. Excluding the impact of lower exchange rates this year, revenue was still flat for the quarter. Comparable sales increased 1%, with stores down 2% and direct up 19%. Direct-to-consumer sales were 16.6% of total retail sales for the quarter, compared to 13.7% last year. Fourth quarter gross margin was 46.9%, up 20 basis points, compared with 46.7% last year. The increase as a percentage of sales reflects decreased markdowns for Journeys Group, more full-price selling for Schuh Group, partially offset by increased markdowns at Johnston & Murphy retail. Net earnings amounted to $35.6m, compared to a net loss of $64m in the prior-year period.
Full-year net sales were also flat $2.2bn, compared to Fiscal 2019. Excluding the impact of lower exchange rates this year, revenue increased 1% for the year. Comparable sales increased 3%, with stores up 1% and direct up 18%. Direct-to-consumer sales were 12.6% of total retail sales for the year compared to 10.8% last year. Gross margin expanded to 48.4%, up 60 basis points, compared with 47.8% last year. The increase as a percentage of sales reflects decreased markdowns for Journeys Group, better margins on sale-price product for Schuh Group and improved wholesale margins for Johnston & Murphy. Net earnings, meanwhile, totalled $61.4m, compared to a net loss of $51.9m a year earlier.
Off-price fashion retailer Stein Mart has reported a net loss of US$0.3m for the fourth quarter ended 1 February, compared to net income of $3.7m last year. Net sales declined to $336.6m from $340.8m for the fourth quarter of 2018. Net sales were impacted by fewer stores operating during the quarter, the company said. Comparable sales increased 0.1%, while omni sales, defined as all online sales regardless of fulfillment channel, were up 7% over last year’s fourth quarter.
For the year, net sales decreased 3% to $1.22bn, while comparable sales declined 1.4 % to last year. Net sales were impacted by fewer stores operating during the year and comparable sales results. Omni sales increased 11% over 2018. Net loss for the year was $10.5m, compared to net loss of $6.2m for 2018.
Last month, Stein Mart struck a deal for its takeover by a private equity firm. The merger, which is expected to be completed in the first half of calendar year 2020, is subject to approval by Stein Mart’s shareholders and the satisfaction of other customary closing conditions.
CEO Ed Thomas said a deeper than expected drop in store traffic and comparable store net sales during the second and third weeks of December resulted in a “disappointing” fourth-quarter overall, which he noted was the company’s first negative comp quarter in over three and a half years.
For the period ended 1 February, total net sales were US$172.5m, an increase of $1.9m or 1.1%, compared to $170.6m last year. Comparable store net sales, which includes e-commerce net sales, decreased 2% compared to last year’s increase of 6.4%. Comparable store net sales in physical stores declined 2.2% and represented about 80.7% of total net sales, compared to a decrease of 0.9% and an 80.3% share of total net sales last year. E-commerce net sales were down 1.2% and represented about 19.3% of total net sales, compared to an increase of 49.6% and a 19.7% share of total net sales last year. Net income, meanwhile, fell to $6.3m from $8.7m a year ago, while gross margin narrowed to 30.2% from 30.6% net sales last year.
“Comparable store net sales are off to a positive start thus far in the first quarter of fiscal 2020. However, due to the uncertainty of the potential near-term impacts of the coronavirus situation, we are unable to provide specific earnings guidance at this time,” Thomas added.
Footwear retailer Caleres has reported consolidated sales of US$698.9m for the quarter ended 1 February, a 3% decline from $720.3m last year. Famous Footwear total sales were $369.5m, up 1.2%, with same-store-sales up 5.1%, while Brand Portfolio sales of $346m, were down 9.4% on last year. Net earnings for the quarter were $0.4m, compared to a net loss of $75.5m in the prior-year period. Adjusted net earnings were $13.94m, while gross margin expanded to 39.9% from 38.6% a year ago. Adjusted gross margin was 40.1%.
Caleres said it is actively monitoring the coronavirus, adding its executive management team is meeting regularly to rigorously evaluate the potential impact of the virus on the supply chain and broader consumer sentiment.
“Looking ahead, in the short-term, we do anticipate disruptions related to the coronavirus and are expecting headwinds between $0.15 and $0.20 per share in the first quarter of 2020,” said CEO Diane Sullivan. “While potential impacts on full-year 2020 results are difficult to quantify at this early stage, we will continue to actively assess the situation.”
Fashion apparel retailer Express has reported a net loss of US$141.6m for the 13 weeks to 1 February, compared to a net loss of $1.1m in last year’s fourth quarter. Excluding costs related to the company’s intangible asset impairment, restructuring, and executive departures, adjusted net income was $12.2m, compared to adjusted net income of $12.8m last year. Consolidated net sales, meanwhile, decreased 3% to $606.7m from $628.4m in the prior-year period, with consolidated comparable sales down 3%. Comparable retail sales, which includes both Express stores and e-commerce, declined 5% compared to the fourth quarter of 2018. In total, retail sales decreased to $444.6m from $479m last time. Comparable outlet sales increased 2% versus last year, with total outlet sales rising to $143.8m from $129.4m. Gross margin declined by 60 basis points, representing 27% of net sales compared to 27.6% in last year’s fourth quarter.
For the full year, net loss was $164.4m, compared to net income of $9.6m in 2018. Adjusted net loss was $8.4m, compared to adjusted net income of $23.6m. Consolidated net sales decreased 5% to $2.02bn from $2.12bn last year.
“Our results show the third consecutive quarter of sequential improvement in our comp sales trend, as the actions we have taken in the early stages of our transformation are resonating with customers,” said CEO Tim Baxter. “While there is certainly volatility surrounding the coronavirus, our lean inventory position gives us the flexibility to invest appropriately in new product in response to business trends in the coming months.”
In January, Express narrowed its fourth-quarter guidance and outlined a new three-year corporate strategy which includes a ‘fleet rationalisation plan’ to close about 100 stores by 2022 and a new approach to product.
Dick’s Sporting Goods
Edward Stack, chairman and CEO of Dick’s Sporting Goods, said the company is “very pleased with our strong fourth-quarter results”, noting a 5.3% comp sales increase, supported by increases in both average ticket and transactions, as well as growth across each of its three primary categories of hardlines, apparel and footwear. Net sales for the 13 weeks to 1 February, increased 4.7% to about US$2.61bn, the company said, adding consolidated same-store sales were up by 5.3%. Consolidated net income, meanwhile, amounted to $69.8m in the period, compared to $102.6m last year. On a non-GAAP basis, consolidated net income was $113.3m. Fourth-quarter 2019 non-GAAP results exclude pre-tax hunt restructuring charges of $48.8m, which included $35.7m of non-cash impairments related to a trademark and store assets and a $13.1m write-down of inventory, resulting from the company’s decision to remove the hunt department from approximately 440 additional Dick’s Sporting Goods stores in fiscal 2020.
The company reported consolidated net income for the full year of $297.5m, compared to $319.9m the year before. On a non-GAAP basis, consolidated net income was $329.1m. Net sales, meanwhile, increased 3.7% to about $8.75bn. Consolidated same-store sales also increased 3.7%.
Weyco Group, Inc
Footwear maker Weyco has reported a 3% drop in net sales for the fourth quarter ended 31 December to US$86.9m from $89.6m last year. Net earnings attributable to the company totalled $8.8m for the quarter, a decrease of 8% compared to $9.6m in last year’s fourth quarter.
For the full year, overall net sales were $304m in 2019, an increase of 2%, compared to $298.4m in 2018. Net earnings attributable to the company rose 2% to $20.9m in the year, up from $20.5m last time.
Burlington Stores CEO Michael O’Sullivan said the company is pleased with its fourth-quarter results, driven by a “solid” 3.9% comparable-store sales increase. For the fourth quarter ended 1 February, total sales increased 10.5% to US$2.2bn, while comparable store sales increased 3.9%. New and non-comparable stores contributed an incremental $151m in sales during the quarter. Net income increased 12% to $206m, while gross margin rate increased 20 basis points to 42.1%.
Meanwhile, total sales increased by 9.3% in Fiscal 2019, which included a comparable store sales increase of 2.7% on top of last year’s 3.2% comparable-store sales increase. Net income rose 12% over the prior-year period to $465m.
Kontoor Brands, the owner of iconic denim brands Wrangler and Lee, has posted fourth-quarter revenue of US$653m, a 10% year-over-year decline on a reported and constant currency basis. Revenue decreased 8% compared to fourth-quarter 2018 adjusted revenue. Kontoor said revenue declines in the period were driven by strategic quality-of-sales initiatives, which contributed 3 points to the decline; the reduced sales of certain lower margin lines of business and lower distressed sales, which represented about 1 point of the decline; and, impacts of a major US retailer bankruptcy in the fourth quarter of 2018, which represented about 1 point of the decline. Wrangler brand global revenue decreased to $417m, a 6% decrease on a reported and constant currency basis. As expected, Lee brand global revenue sequentially moderated in the fourth quarter, decreasing 12% to $202m on a reported basis and in constant currency. Net income, meanwhile, dropped 45% to $28.8m from $51.9m last year, while fourth-quarter reported gross margin increased 210 basis points to 40.7% on a reported basis. On an adjusted basis, gross margin increased 30 basis points to 40.9%. Increases were primarily due to the favourable impacts of restructuring and quality-of-sales initiatives, as well as improving channel mix, which more than offset the negative impact of actions taken to exit points of distribution in India and foreign currency headwinds.
American Eagle Outfitters, Inc
American Eagle Outfitters, Inc (AEO) said total net revenue for the 13 weeks ended 1 February, increased US$70m, or 6% to $1.31bn compared to $1.24bn in the prior-year period. Consolidated comparable sales increased 2% over last year, marking the 20th consecutive quarter of positive comparable sales. By brand, American Eagle comparable sales decreased 3%, compared to a 3% increase last year. Aerie’s comparable sales rose 26%, following a 23% increase last year, marking the 21st consecutive quarter of double-digit sales growth. Gross margin rate of 31% narrowed to 34.6% last year. AEO said higher markdowns were the primary cause of the reduction to last year. Increased distribution centre and delivery costs were offset by lower incentives and slight rent leverage. Net income, meanwhile, fell to $4.76m from $76.2m last year. AEO said it incurred impairment, restructuring and related charges of about $76m pre-tax in the fourth quarter of 2019. About $65m of the pre-tax charges related to the non-cash impairment of 20 stores and the remainder primarily reflected severance and other costs.
Full-year net revenues increased 7% to a record $4.3bn, compared to $4bn last year, while consolidated comparable sales increased 3%. By brand, American Eagle comparable sales were up slightly, compared to a 5% increase last year. Aerie’s comparable sales increased 20%, following a 29% increase in 2018. Gross margin rate decreased 160 basis points to 35.3% of revenue compared to 36.9% last year, while net income dropped to $191.3m from $261.9m last time. For the full year 2019, AEO incurred impairment, restructuring and related charges of about $80m pre-tax, including about $4m of pre-tax restructuring charges incurred in the first half of the year. This compared to $2m of pre-tax restructuring and related charges for the full year 2018.
Abercrombie & Fitch Co.
CEO of Abercrombie & Fitch, Fran Horowitz, said the company finished the year on a “strong note”, with record Black Friday week results contributing to net sales growth and positive comparable sales for the fourth quarter, and for the third consecutive year. For the period ended 1 February, net sales of US$1.18bn increased 3% on both a reported and constant currency basis as compared to last year. Comparable sales were up of 1% against a 3% rise last year. By brand, same-store sales at Abercrombie were up by 8%, while at Hollister comp sales fell 2%. Meanwhile, gross profit rate of 58.2% was down 90 basis points on a reported basis and down 40 basis points on a constant currency basis as compared to last year. Net income attributable to Abercrombie & Fitch Co., fell to $83.1m from $96.9m in the prior-year quarter.
Meanwhile, Abercrombie & Fitch said it expects to see the majority of the impact from the coronavirus (Covid-19) outbreak to occur in the first half. For fiscal 2020, the company expects net sales to be flat to up 2%, reflecting the estimated adverse impact of Covid-19 in the range of $60m-$80m.
Consolidated net sales at discounter Dollar Tree increased 1.8% to US$6.32bn from $6.21bn in the prior year’s fourth quarter. Enterprise same-store sales increased by 0.4%, while same-store sales for the Dollar Tree segment were up by 1.4% on a constant currency basis. Same-store sales for the Family Dollar segment decreased 0.8%. Net income in the period, meanwhile, totalled $123m, compared to a net loss of $2.31bn last year when it incurred a $2.73bn after-tax goodwill impairment charge related to its Family Dollar business. Gross margin was 31% compared to an adjusted gross margin of 31.5% in the prior year. The decrease in gross margin was driven by tariffs, partially offset by improved freight costs. Other contributors to the decrease were higher occupancy, distribution and shrink costs as a percentage of net sales.
Ross Stores CEO Barbara Rentler said the company delivered “strong sales and earnings growth” for both the fourth quarter and fiscal year. For the 13 weeks ended 1 February, sales rose to US$4.4bn from $4.1 a year ago, with comparable-store sales up 4% on top of a 4% gain in the prior-year period. Net earnings also increased, rising to $456.1m from $441.7m last time.
For the 2019 fiscal year, net income was $1.7bn, up from $1.6bn last year. Sales for the 2019 year grew 7% to $16bn, with same-store sales up 3% on top of a 4% gain last time.
Nordstrom has reported fourth-quarter results, excluding charges, in-line with the company’s prior outlook. Net earnings were US$193m, compared with $248m during the same period in fiscal 2018. Fiscal 2019 included $29m of charges, after-tax, primarily representing non-cash asset write-downs resulting from the integration of Trunk Club in addition to debt refinancing costs. Net sales, meanwhile, rose to $4.44bn from $4.38bn last year. In full-price, net sales increased by 1%, while in off-price, net sales were up 1.8%. Digital sales grew 9% and represented 35% of sales. Gross profit, as a percentage of net sales, of 35% decreased 9 basis points compared with the same period in fiscal 2018. This was primarily due to higher costs from growth of the loyalty programme and planned occupancy costs related to the NYC flagship store, partially offset by increased merchandise margins.
Meanwhile, Nordstrom also announced it will transition from its co-president structure to a sole CEO, with Erik Nordstrom to serve in this role. Pete Nordstrom has been named as the company’s president of Nordstrom Inc and Chief brand officer. Both will remain on the company’s Board of Directors.
Urban Outfitters, Inc
Urban Outfitters has reported a drop in fourth-quarter earnings as net income for the three months ended 31 January fell to US$19.54m from $86.41m in the prior-year period. Adjusted net income was $49.07m, compared to $90.24m last year. Adjusted net income excludes store and goodwill impairment charges and income tax expense related to valuation allowances attributable to net losses of certain foreign operations. Gross profit rate decreased by 446 basis points and the adjusted gross profit rate decreased by 351 basis points versus the prior year’s comparable period. The decrease in adjusted gross profit rate was driven by higher retail segment markdowns, deleverage in delivery and logistics expenses and lower wholesale segment margins.
The company did, however, report record fourth-quarter sales as total company net sales for the three months increased 3.6% over the same period last year to $1.17bn. Comparable retail segment net sales rose by 4%, driven by growth in the digital channel, partially offset by negative retail store sales. By brand, comparable retail segment net sales were up 9% at Free People, 6% at the Anthropologie Group and were flat at Urban Outfitters. Total retail segment net sales increased 4%, while wholesale segment net sales fell 10% due to a 12% decrease in Free People.
For the full year, net income totalled $168.1m, compared to $298m last time, while total company net sales rose to $3.98bn from $3.95bn in th previous year.
US department store retailer Kohl’s has reported flat comparable sales in the fourth quarter, as total revenue edged up 0.1% to US$6.83bn from $6.82bn last year. For the three months to 1 February, reported net income fell 3% to $265m from $272m in the prior-year quarter. On a non-GAAP basis, net income declined 16% to $308m from $366m. Gross margin narrowed 81 basis points to 32.7% from 33.5% last year.
For the full year, comparable sales were down 1.3% on the previous year, while total revenue dropped to $19.97bn from $20.23bn. Reported net income was $691m, down 14% on $801m last time. On a non-GAAP basis, net income declined 17% to $769m from $927m. Gross margin, meanwhile, narrowed 64 basis points to 35.7% from 36.4% in the previous year.
Department store retailer Target Corp has reported a 1.8% rise in total revenue to US$23.4bn, reflecting sales growth of 1.8% and a 9.3% increase in other revenue. The company’s total comparable sales grew 1.5% in the fourth quarter ended 1 February, reflecting comparable digital sales growth of 20%. Net earnings amounted to $834m, up 4.4% from $799m in the prior-year period. Gross margin rate was 26.3%, compared with 25.7% in 2018. Target said the increase reflected the benefit of merchandising efforts to optimise costs, pricing, promotions and assortment, combined with the benefit of favourable category sales mix.
Total revenue for the full year was $78.1bn, up 3.7% from $75.4bn last time, while full-year comparable sales grew 3.4%, reflecting comparable digital sales growth of 29%. Net earnings, meanwhile, rose 11.7% to $3.3bn from $2.9bn. Full-year gross margin rate expanded slightly to 28.9% from 28.4% in 2018.
Foot Locker has reported a drop in fourth-quarter profit and revenue. For the period ended 1 February, the company reported net income of US$141m, compared to $158m for the corresponding prior-year period. Adjusted net income (non-GAAP) amounted to $171m, compared to $177m last year. Total sales, meanwhile, decreased by 2.2% to $2.22bn from $2.27bn in the fourth quarter of 2018. Excluding the effect of foreign exchange rate fluctuations, total sales declined by 2%. Comparable-store sales were down 1.6%.
For the full year, Foot Locker reported sales of $8bn, a new record as Foot Locker, Inc, which marked an increase of 0.8% compared to sales of $7.94bn in fiscal 2018. Excluding the effect of foreign currency fluctuations, total sales were up 2%. Full-year comparable-store sales increased by 2.2%. The company’s net income decreased to $498m as compared to 2018 reported net income of $541m. Adjusted net income (non-GAAP) totalled $538m, compared to $547m last time.
Crocs has reported a 21.8% rise in fourth-quarter revenues to US$263m, or 22.7% on a constant currency basis, compared to last year. Currencies negatively impacted revenues by about $2m, while store closures reduced revenues by $2m. Wholesale revenues grew 22.4%, e-commerce revenues were up by 34.3%, and retail comparable store sales on a constant currency basis rose 16%. Net income was $19.9m, compared to a net loss of $118.7m a year earlier. Gross margin was 48%, compared to 46.2% in last year’s fourth quarter. Adjusted gross margin, which excludes 130 basis points of expenses primarily related to the relocation of Croc’s distribution centres in the US and the Netherlands, was 49.3%.
Crocs said it expects revenues for the first quarter of 2020 to be negatively impacted by about $20-$30m due to disruptions to its Asia business from Covid-19 and by approximately $3m due to currency. “Many of our partner stores in China are closed temporarily. For those that remain open, they are operating on a reduced schedule and experiencing lower than usual traffic levels,” Crocs said. “We are also seeing the broader impact as we are experiencing traffic declines throughout many of our key countries in Asia.”
JCPenney expects to close at least six store locations in fiscal 2020, amid a drop in fourth-quarter total net sales and net income. For the fiscal quarter to 1 February, total net sales decreased by 7.7% to US$3.38bn, from $3.67bn last year. Comparable store sales declined by 7% for the quarter. Adjusted comparable store sales, which exclude the impact of the company’s exit from major appliance and in-store furniture categories, were down by 4.7%. Net income, meanwhile, fell to $27m from $75m a year ago. Adjusted net income was $43m, compared to adjusted net income of $57m last time.
For fiscal 2019, total net sales fell 8.1% to $10.72bn. Comparable store sales were down 7.7% for the year, and net loss widened to $268m from $255m last year. Adjusted net loss, however, improved to $257m from $296m last year. CEO Jill Soltau said she is “encouraged” by the company’s progress, especially in its women’s apparel businesses.
CEO Bonnie Brooks said the company’s “significant sequential turnaround” in its business resulted in its first quarter of positive comparable sales for all three brands since the fourth quarter of 2014. For the three months to 1 February, net sales increased to US$527.1m from $524.7m a year earlier. The 0.4% rise reflects a comparable sales improvement of 2.2%, partially offset by the impact of 77 store closures since last year. The comparable sales improvement was driven by higher average dollar sale and an increase in transaction count. Chico’s narrowed its net loss in the quarter to $4.3m from $16.6m a year ago. Adjusted net loss was $3.5m, compared to $8.6m last time. Gross margin expanded to 32.5% from 30.2% in last year’s fourth quarter. The 230-basis point increase primarily reflects a 180-basis point favourable net impact resulting from lower impairment and accelerated depreciation charges related to the company’s retail fleet optimisation plan, combined with a 150-basis point improvement in occupancy and omnichannel programme costs as a percent of sales, partially offset by an approximate 100-basis point impact of incremental tariffs on maintained margin.
Steve Madden has reported a rise in both earnings and revenue for the fourth quarter ended 31 December. Revenue increased 0.7% to US$419.6m, compared to $416.8m in the same period of 2018. Revenue for the wholesale business fell by 1.1% to $313.8m, due to a decline in wholesale accessories/apparel revenue. Retail revenue rose 8.7% to $101.1m, while same-store sales increased 6.7%, driven by strong performance in the company’s e-commerce business. Meanwhile, net income attributable to Steven Madden Ltd rose to $17.8m from $12.5m in the prior year’s fourth quarter. Adjusted net income was $32.2m, compared to $35.7m last time. Gross margin narrowed to 37.7% from 38.1%, while adjusted gross margin was 37.8%.
For the full year, revenue increased 6.5% to $1.8bn, while net income rose 9.5% to $141.3m, compared to $129.1m a year ago.
L Brands has reported a net loss of US$192.3m for the fourth quarter ended 1 February, compared to net income of $540.1m last year. The fourth quarter 2019 reported results include a pre-tax charge of $725m related to Victoria’s Secret goodwill and store-related assets, compared to a pre-tax charge of $99.2m in 2018, related to the sale of La Senza. Adjusted net income was $523.7m, compared to $595.2m a year ago. Net sales, meanwhile, fell to $4.71bn from $4.85bn last year, while comparable sales decreased 2%.
For the full year, net loss amounted to $366.4m, compared to net income of $643.9m last year. Adjusted net income was $637.3m compared to $786.7m last time. Net sales dropped to $12.91bn from $13.24bn, while comparable sales decreased 1%.
L Brands said the Bath & Body Works business reported record results for the fourth quarter and full-year 2019. For the year, Bath & Body Works North America segment comparable sales increased 10%, including a 5% increase in stores and a 32% rise in the direct business. Sales rose 12% to $5.17bn and operating income was up 11% to $1.19bn. In the Victoria’s Secret North America segment, sales for the full year declined 8% to $6.81bn, on a comparable sales decline of 7%. The full-year reported operating loss, which includes significant items of $730.7m in non-cash impairment charges, was $616.1m. Last week, L Brands sold a majority stake in its Victoria’s Secret business to private equity firm Sycamore Partners, in a deal worth $525m.
The TJX Companies, Inc
Off-price apparel and home fashions retailer The TJX Companies has reported what CEO Ernie Herrman called strong fourth-quarter results, as both sales and earnings per share “significantly” exceeded company expectations. For the period ended 1 February, net sales increased 10% to US$12.2bn. Consolidated comparable store sales were up 6%, above the company’s guidance of a 2% to 3% increase, and over last year’s 6% growth. Net income for the fourth quarter amounted to $984.8m, compared to $841.5m in the prior-year period. Gross profit margin was 28.4%, a 0.6 percentage point increase versus the prior year.
For the full year, net sales increased 7% to $41.7bn, while consolidated comparable store sales were up 4% over a 6% increase last year. Net income increased to $3.3bn from $3.1bn. Gross profit margin for the full year fiscal 2020 was 28.5%, a 0.1 percentage point decrease versus the prior year.
Rocky Brands, Inc
Rocky Brands has booked a rise in both earnings and revenue for the fourth quarter with CEO Jason Brooks noting fourth-quarter performance represents a “fantastic finish to a record year of profitability” for the company. For the three months to 31 December, net sales increased 12.1% to US$75.3m versus net sales of $67.2m in the fourth quarter of 2018. Net income surged 41% to $5.1m, compared to $3.6m in the year-ago period. Gross margin expanded 17.1% to represent 37.5% of sales from 35.9% for the same period last year. The 160 basis point increase was driven by a higher percentage of retail sales, which carry higher gross margins than wholesale and military sales, and higher wholesale, retail and military segment margins versus the same period last year.
For fiscal year 2019, net sales increased 7% to $270.4m, while net income was up 20% to $17.5m. Gross margin for 2019 widened to 36.1% from 34.4% for the same period last year.
A weak top-line weighed heavily on the bottom line in the fourth quarter, according to Dillard’s CEO William Dillard, II. Dillard’s reported net income for the 13 weeks ended 1 February of US$67.7m, compared to net income of $85.1m for the prior year fourth quarter. Net sales, meanwhile, fell to $1.92bn from $2.01bn a year ago. Net sales includes the operations of the company’s construction business, CDI Contractors. Sales in comparable stores for the period decreased by 3%. Sales were strongest in the Eastern and Western regions and weakest in the Central region. By category, sales were strongest in ladies’ apparel and cosmetics with weaker performances in ladies’ accessories and lingerie and home and furniture. Retail gross margin remained flat as a percent of sales.
“Taken as a whole, 2019 did not play out as we intended for Macy’s, Inc. However, we executed well during the holiday 2019 season,” said CEO Jeff Gennette. Net sales for the fourth quarter fell to US$8.34bn from $8.46bn last year, while the retailer reported a comparable sales drop of 0.6% on an owned basis and 0.5% on an owned plus licensed basis. Net income attributable to Macy’s, Inc. shareholders was also down, falling to $340m from $740m in 2018.
Full-year net sales declined to $24.56bn from $24.97bn the prior year, while net income dropped to $564m from $1.11bn.
Earlier this month, Macy’s said it would close about 125 of its least productive stores and slash 9% of its corporate and support function headcount – roughly 2,000 positions – as part of an updated strategy and three-year plan.
Wolverine World Wide
Wolverine World Wide CEO Blake Krueger said the company delivered a strong finish to the fiscal year as reported revenue increased by 4.8% to US$607.4m compared to the prior year and adjusting for currency, increased 5.1%. For the period ended 28 December, net loss attributable to Wolverine World Wide totalled $0.9m, compared to net earnings of $39.3m in the prior-year period. Reported gross margin of 37.8%, decreased 140 basis points versus the prior year.
For the full year, reported revenue of $2.27bn represented an increased 1.5% compared to the prior year and adjusting for currency, increased 2.3%. Net earnings amounted to $128.5m, compared to $200.1m last year. Reported gross margin of 40.6%, decreased 50 basis points versus the prior year.
The company said it is continuing to monitor and adjust to the coronavirus situation, noting in recent years it has diversified its supply chain away from China. In 2020, the country is expected to represent less than 20% of its global production, down from about 40% in fiscal 2019. It added the coronavirus outbreak is expected to impact revenue by about $30m in the first half of 2020.
Carter’s CEO Michael Casey said the company has achieved its fourth-quarter sales objective with growth driven by its retail and international businesses. He added profitability in the quarter was lower than last year, however, and reflects continued investments in the business and higher inventory-related costs. For the three months to 28 December, consolidated net sales increased US$14.1m, or 1.3%, to $1.1bn. Favourable changes in foreign currency exchange rates improved consolidated net sales in the fourth quarter by $0.3m. Net income, meanwhile, declined 4.1% to $125.1m, compared to $130.6m last year. Adjusted net income (a non-GAAP measure) decreased by 4.7% to $124.7m from $130.9m a year ago.
For the full year, consolidated net sales increased 1.6% to $3.5bn, while net income fell to $263.8m from $282.1m in fiscal 2018. Fiscal 2019 earnings included after-tax net charges totaling $27.9m. Adjusted net income amounted to $291.7m, compared to $295.4m last time.
Carter’s, which plans to source about 15% of its products from China in 2020, added its suppliers have not yet determined, with certainty, the impact of production delays related to the coronavirus (Covid-19) outbreak. Accordingly, the financial impact of any delayed receipts from China is not known at this time. The company’s guidance for fiscal year 2020 and the first quarter of fiscal 2020 does not include any adjustments for potential effects of the coronavirus situation.
US retail giant Walmart has reported an increase of US$2.9bn, or 2.1%, in total revenue to $141.7bn for the fourth quarter. Net sales in the period totalled $140.6bn, with Walmart reporting US fourth-quarter comp sales of 1.9% and a 35% rise in e-commerce sales. Consolidated net income attributable to Walmart increased 12.3% on last year to $4.1bn.
For the full year, total revenue increased $9.6bn, or 1.9%, to $524bn, while net sales also increased by 1.9% to $519.9bn. Consolidated net income attributable to Walmart, meanwhile, surged to $14.9bn from $6.7bn.
US sportswear brand Under Armour has posted a net loss of US$15.3m for the fourth quarter ended 31 December, compared to net income of $4.2m last year. The company said its net loss was inclusive of a $23m tax expense, related to the recording of valuation allowances against certain of the company’s US state deferred tax assets, and a $39m impairment charge, related to the company’s equity interest investment in its Japan licensee. Revenue, however, was up 4% in the period to $1.44bn from $1.39bn a year ago. Gross margin increased 230 basis points to 47.3% compared to the prior year driven primarily by pricing including lower discounts to the company’s wholesale partners, channel mix and supply chain initiatives. For the full year, net income amounted to $92m, compared to a net loss of $46.3m in 2018. Revenue was up 1% to $5.3bn, while gross margin was 46.9%, a 180-basis point improvement from 45.1% in the prior year driven predominantly by supply chain initiatives, channel mix and prior period restructuring charges.
Under Armour is assessing the potential impact of the coronavirus outbreak on its supply chain and expects a hit of up to $60m on first-quarter sales in the APAC region. The company is also considering a potential 2020 restructuring initiative to rebalance its cost base to further improve profitability and cash flow generation.
Underwear and activewear maker HanesBrands has delivered what CEO Gerald Evans Jr called a “solid” fourth-quarter, in-line with company guidance. For the period ended 28 December, net sales of US$1.75bn decreased 1% while constant-currency organic sales increased slightly. International segment sales increased by 7%, while on a constant-currency basis, net sales were up 10%. Sales for the international segment’s activewear and innerwear businesses increased more than expected. US innerwear segment sales decreased 4% in the fourth quarter while US activewear sales were down by 7%, slightly better than expected. Champion sales, excluding C9 Champion in the mass channel, increased more than 14% in the quarter. Net income, meanwhile, rose to $185m from $150m in the year-ago period.
Net sales at Columbia Sportswear increased 4% on last year to a record US$954.9m for the three months ended 31 December. Net income was up 1% to $114m from $113.3m last year. However, on a non-GAAP basis net income slipped 2% from $116.9m a year ago. The fourth-quarter included the benefit of full ownership of the company’s China business, which became a wholly-owned subsidiary in January 2019. Gross margin, meanwhile, declined 160 basis points to 50.1% from 51.7% a year ago. The company also reported record annual results with net sales up 9%, or 10% in constant currency, to $3.04bn. Net income increased 23% to $330.5m from $268.3m in 2018, while gross margin expanded 30 basis points to 49.8% from 49.5%.
Casual footwear brand Skechers USA reported record fourth-quarter sales of US$1.33bn, an increase of 23.1% from $1.08bn last year. The rise was due to a 31.2% increase in its international business, and a 13% hike in its domestic business. On a constant currency basis, total sales were up by 23.8%. Comparable same-store sales in company-owned stores and e-commerce grew 9.9%, including 10.3% in the United States and 8.8% internationally. Net earnings were also up on last year, rising 25.8% to $59.5m from $47.4m. Gross margin increased by 20 basis points as a result of improved average selling price per unit, partially offset by an increase in the average cost per unit driven, in part, by higher duties in its domestic wholesale business.
Skechers also booked record annual sales of $5.22bn, up 12.5% on the prior year as a result of a 20.2% increase in the company’s international business, or 24.3% on a constant currency basis, and a 3.3% increase in its domestic business. Net earnings amounted to $346.6m, up 15.1% from $301m last time, while gross margin narrowed to 47.7% from 47.9% as a result of promotional efforts to clear seasonal inventory during the year and an increase in the average cost per unit in select international markets.
Addressing the coronavirus outbreak in China, CEO Robert Greenberg said: “We continue to monitor the situation and its potential disruption to our global business.”
Levi Strauss & Co
Jeans giant Levi Strauss & Co saw both earnings and revenue fall in the fourth quarter. Neither the fourth quarter or fiscal year include the benefit of the Black Friday week. For the three months to 24 November, net revenues of US$1.57bn declined 2% on a reported basis and were nearly flat in constant-currency. The lack of Black Friday benefit, combined with the impact from the acquisition of a South American distributor, hit year-on-year net revenue growth comparison by about 3 percentage points, the company said. In Europe, net revenues grew 5% on a reported basis and 8% on a constant-currency basis, while in the Americas, net revenues declined 5%. In Asia, net revenues grew 1% on a reported basis and 2% in constant currency. Net income, meanwhile, fell 2% to $96m from $97m last year. Adjusted net income was down 9% to $108m from $118m last time. Gross margin of 54.3% was up 110 basis points compared with 53.2% last year, reflecting lower sales to the off-price channel and price increases. Currency unfavourably impacted fourth-quarter gross margin by 20 basis points.
For the full year, net revenues of $5.8bn grew 3% on a reported basis and 6% in constant currency. The lack of a Black Friday benefit and the acquisition of a South American distributor in 2019 impacted net revenue growth comparisons by about 1 percentage point. Net income of $395m was up from $285m the year before, primarily due to a charge in 2018 from the impact of the change in tax law in the US. Adjusted net income of $456m was up 9% on the prior year. Gross margin was flat on a reported basis. Currency unfavourably impacted fourth-quarter gross margin by 60 basis points.