Week in Review

October 2, 2022

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Week in Review | Oct 02, 2022

Concerned that consumer confidence (and spending) could weaken in the coming months, more retailers are rolling out early holiday promotions.

Consumers will be strategizing as to whether they should grab early deals – or wait to see if retailers lower prices in desperation later in the season.

FINANCE

H&M (Sweden) reported Q3 profits dropped by 88% to $56 million. The brand said a major part of this was the $245 million cost attributed to its exit from Russia.

Sales rose 3% to $5.97 billion in Q3, and rose 13% for the first nine months of the year.

Boohoo (UK) has issued a profit and sales warning blaming the cost of living crisis. Sales fell 10% to £882 million ($983 million) in the half year to Aug. 31.

Adjusted profits were down 58% to £35 million ($39 million).
The company expects sales for the second half of the year to be down by about 10% year-on-year.

Nike (USA) reported revenue rose 4% year-on-year to $127 billion for the quarter ended August 31. Net income fell 22% to $1.5 billion.

Inventories were up 44% year-on-year, which the brand attributed to supply chain issues.
Nike has been working aggressively to reduce inventories ahead of the holiday season.

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RETAIL

Amazon (USA) is rolling out what it is calling its Prime Early Access sale on Oct 11-12 in a move to be one of the first to capture holiday shopping budgets.

The platform is rumored to be planning to also have Prime Day later in the season to further boost revenues.

Target (USA) is launching an early holiday promotion on Oct. 6-8 and is guaranteeing to match prices if consumers find better prices elsewhere.

Forever 21 Inc.(USA) will re-enter the Japanese market, planning to sell its products online from February before opening stores after April, according to its Japanese partner Adastria Co.

It aims to open between 15 and 18 outlets by 2028 and is targeting sales of $70 million for the year ending February 2028.

American Eagle (USA) said it was returning to Japan with the opening of two flagship stores in Tokyo in October. The brand had only been available online in Japan following the closure of its last physical stores in 2019.

Primark (UK) aims to have 530 stores around the globe by 2026. The company remains focused on brick-and-mortar.

Macy’s (USA) is the newest retailer to launch a third-party online marketplace, joining Walmart, Target, and Bed Bath & Beyond.

Amazon still has about 40% of the US ecommerce market, while Walmart (in 2nd place) accounts for 7%, per eMarketer.

Desigual (Spain) plans to open 60 stores in Mainland China, including flagships in Shanghai and Beijing, in a joint venture with E-Shine (China).

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MARKETS

On the back of falling gas prices and a still strong job market, US consumer confidence rose for a second month in September to the highest since April. The Conference Board’s index increased to 108 from a 103.6 reading in August, easily eclipsing the median forecast of 104.6

U.S. headline personal consumption expenditures (PCE) index slipped, however its core equivalent – which removes volatile food and energy prices – rose from an annual rate of 4.7% in July to 4.9% in August.

Annual inflation in the 19-country group that uses the euro exceeded 10% in September, the highest level in the history of the currency, mainly driven by soaring energy costs.

In contrast, French inflation slowed unexpectedly for a second month running in September, helped by decelerating increases in prices of energy and services, per Reuters.