Week in Review

August 28, 2022

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Week in Review | Aug. 28, 2022

Q1 talk of price increases is now just a memory as more retailers head back to competing on price.

FINANCE

Foot Locker (USA) reported Q2 total sales decreased by 9.2% year-on-year to $2.06 billion. Same-store sales fell 10.3%. Net income fell 78% to $94 million, from $430 million a year ago.

The company attributed the year-on-year decline to extraordinary sales in 2021 as stimulus payouts fueled consumer spending.

Nordstrom (USA) reported Q2 total revenue rose 12% to $4.095 billion. Earnings before interest and tax (EBIT) increased 57% year-on-year to $127 million.

Men’s apparel had the strongest growth in Q2, while women’s apparel and shoes showed strong double-digit growth.
The retailer has warned that it expects sales to soften in H2.

Macy’s (USA) reported Q2 net income fell 20% year-on-year to $275 million. Net sales slid 0.8% to $5.600 billion.

The retailer cited “increased macroeconomic pressures and markdowns and promotions to clear aged inventory” for the decline in earnings, as well as slightly lowering its outlook for full year sales.
The company saw the strongest growth in career and tailored sportswear, shoes, and dresses.

Urban Outfitters (USA) reported Q2 sales rose 2.2% year-on-year to $1.18 billion. However net income fell 53% to $59 million.

H1 sales rose 7.2%, but net income fell 50%.

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MORE FINANCE

Dick’s Sporting Goods (USA) reported net earnings fell 36% year-on-year to $318.4 million in the quarter ended July 30. Sales fell 4.9% to $3.11 billion, but were up 38% compared with the same quarter in 2019.

For the full year, the company has optimistically raised its outlook for both sales and earnings.

GAP (USA) reported Q2 sales fell 8% to $3.86 billion. The company swung to a loss of $49 million.

Old Navy net sales were down 13% year-on-year, while Banana Republic sales rose 9% during the period.

Victoria’s Secret (USA) said Q2 revenue fell 6% and net income dropped more than 50% to $69.9 million.

Dollar General (USA) reported Q2 sales rose 9% to $9.4 billion. Net income was up 6.4% to $678 million.

The company opened 227 new stores in Q2.

Dollar Tree (USA) reported Q2 revenue rose 6.7% to $6.8 billion. Net income increased 27.4% to $359.9 million.

– In Q2 the retailer opened net 70 new stores.

Abercrombie & Fitch (USA) reported Q2 sales fell 7% to $805.1 million and the company swung to a loss.

The retailer warned it expects full-year net sales to decline from 2021.

Bed Bath & Beyond (USA) has secured a loan deal that would provide liquidity and give vendors confidence they can continue to ship goods to the retailer, according to the Wall Street Journal.

MARKET

The Federal Reserve head Jerome Powell has urged central bankers around the world to ‘forcefully’ raise interest rates in battle against inflation, regardless of negative consequences for the economy and households.

South Korea raised its key rate by a quarter of a percentage point to 2.5%, as it seeks to slow inflation, which has stayed over 6% for the last two months.

Indonesia raised its benchmark interest rate this week for the first time in nearly four years. The Philippines, New Zealand, Thailand and India also have taken similar measures in August.