just-styles round-up of Q4 apparel and footwear industry results

just-style's round-up of Q4 apparel and footwear industry results

In the latest fourth-quarter filings from US apparel and footwear brands and retailers, Caleres returned to profit, Dick's Sporting Goods achieved growth across key businesses, off-price retailer Burlington Stores saw both sales and earnings climb, and Urban Outfitters produced record fourth-quarter sales.


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 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 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.


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. 


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 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 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 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 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.  

Vince Holding

Vince Holding said net sales increased about 14% to US$73m in the fourth quarter ended 3 February, compared to $63.9m in the year-ago period. In its unaudited preliminary sales results, the firm said its net revenue excluded an estimated $1.5m from the 14th week. Direct-to-consumer segment sales, meanwhile, were up by around 17.5% to $34.5m as compared to the same period last year, excluding sales from the 14th week. Comparable sales increased 16.1% on a 13-week basis, including e-commerce sales, while wholesale segment sales climbed about 11.5% to $38.5m as compared to the prior-year fourth quarter. CEO Brendan Hoffmansaid Vince expects to see improvement in operating income versus last year, excluding potential asset impairment charges.

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 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."