Week in Review

March 20, 2022

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Week in Review | Mar. 20, 2022

Retailers remain bullish on physical stores, with ongoing announcements of ambitious store expansion plans.

FINANCE

Sycamore Partners (USA) is in the early stage of making a possible cash offer for Ted Baker (UK).

Dollar General (USA) reported net income fell to $597.4 million for the quarter ended Jan 28, down from $642.7 million a year ago. Sales rose 2.8% to $8.651 billion.

Full year net sales increased 1.4% to $34.2 billion, while net income fell 9.6% to $2.4 billion.
Reaffirmed plans to open 1100 new stores in 2022.
Plans to open its first international stores, with 10 locations in Mexico.

H&M (Sweden) reported that net sales increased 18% (in local currencies increased) in the first quarter of 2022 (ended Feb 28).

Citi Trends (USA) reported Q4 sales increased 14.2% compared with Q4 2019. Revenue was $240.9 million, beating analysts’ consensus forecasts for the second time in the last four quarters.

Operating income reached $12.6 million, up $1.3 million over Q4 of 2019.
Full year sales reached $991.6, up 26.8% compared to fiscal 2019.

Guess? (USA) reported that Q4 revenues rose 23% year-on-year to $800 million. Earnings from operations increased 69.3% to $125.7 million.

Full year revenues reached $2.59 billion, up 38% year-on-year. Earnings from operations $305.0 million, compared to a $$60.5 million loss last year.
The company expects low single digit revenue growth for fiscal year 2023.

Warby Parker (USA) announced Q4 revenue rose 17.8% to $132.9 million. The brand is adding 40 new stores this year, on top of the 40 stores opened last year.

The company reported a Q4 net loss of $45.9 million, compared with a loss of $4.3 million last year.
Full year net revenue increased 37.4% to $540.8 million.
Full year net loss increased $88.4 million to $144.3 million, primarily as a result of the increased SG&A costs.

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RETAIL

Kohl’s (USA) said it plans to open more than 100 smaller-format stores during the next four years. It is currently testing the new format, which will average about 35,000 sq. ft, compared with its current 80,000 sq. ft store format.

Gap (USA) opened a 4,000-sq.-ft. shop-in-shop in Next’s (UK) largest London store. The opening is part of a joint venture signed last September to grow the Gap business in the U.K. after it closed its own stores there last year.

Ross Stores (USA) opened 22 Ross stores and 8 dd’s Discounts stores in 15 different states and Guam in February and March. The off-price retailer plans to open 100 new stores this year.

MARKETS

The UK mulls work-from-home as part of a series of measures to reduce the nation’s oil usage.

The Bank of England has raised interest rates to 0.75% as policymakers battle to control runaway inflation.

The U.S. Federal Reserve Bank has announced a 0.25% interest rate hike, with additional increases to follow.

National Retail Federation’s (USA) annual forecast expects retail sales to grow between 6% and 8% in 2022, to between $4.86 trillion and $4.95, with some of the gains coming from higher prices due to inflation.

This compares with the 14% growth seen in 2021, but higher than the 10-year, pre-pandemic growth rate of 3.7%. (sales estimates excluded gasoline, autos and restaurants)
Breaking out non-store and online sales year-over-year: these channels are expected to grow between 11% and 13% this year, to between $1.17 trillion and $1.19 trillion.