Week in Review

August 14, 2022

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Week in Review | Aug. 14, 2022

“As retailers grapple with excess inventory and supply chain constraints, it’s likely that the promotional activity seen in July will continue to be an important strategy for retailers.”

– Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated

FINANCE

Ralph Lauren (USA) reported revenue rose 8% year-on-year to $1.49 billion for the quarter ended June 2022.

– Net income fell to $123.4 million, from $164.7 million a year ago, as cost of goods sold grew more than sales, rising 19.8% to $489.2 million.

Same-stores sales for North America were 5% higher, increased 34% for Europe, and rose 19% for Asia.

Dillards (USA) reported Q2 total retail sales rose 1% to $1.55 billion, however net income fell 12% to $163.4 million.

Net sales increased 10% to $3.1 billion for the 26-week period ended July 30, 2022. Net income rose 21% to $414.5 million for the first half of the year.

Warby Parker (USA) reported revenue increased 13.7% to $149.6 million, however losses widened by $21.9 million to $32.2 million. Full year net revenue forecast has been revised down to $584 to $595 million, representing growth of 8% to 10% versus full year 2021.

While the brand continues to acquire customers, its SG&A costs rose 36% year-on-year in Q2 and 44% year-on-year in H1.

HanesBrands (USA) reported Q2 net sales from continuing operations decreased 14% year-on-year to $1.51 billion. Gross profits fell 16% to $572 million.

Canada Goose (Canada) reported sales rose 24% to $69.9 million in the quarter ending July 3.

U.S. sales increased 69% in the quarter while sales in Canada grew 81%.
The company reported a net loss of $62.4 million, compared to a loss last year of $57.5 million.

Allbirds (USA) reported Q2 net revenue rose 15% to $78.2 million, however it also reported a loss of $9.2 million, compared with a loss of $7.6 million.

The company now expects revenue to be between $305 million to $315 million for the full year, which is below the previous guidance of $335 million to $345 million.
Losses are expected to increase to $42.5 million to $37.5 million, compared with a prior forecast for a loss of $25 million to $21 million.

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RETAIL

Majid Al Futtaim (UAE), which operates shopping malls across the Middle East, said retail spending in the UAE increased by 16% year-on-year in the first half (H1) of 2022.

The number of visitors to its shopping malls rose by 15% over 2021.

Primark (UK) is aiming to reach 530 stores by the end of 2026, including entering Romania and Slovakia.

Primark is joining a growing list of retailers who, at least for now, are not raising prices on certain items.

MARKETS

U.S. inflation fell to 8.5% last month from a four-decade high as petrol prices declined.

This has raised hopes that the Federal Reserve will slow the pace of interest rate hikes.

UK inflation is expected to peak above 13%, while the nation’s economy can expect 18 months of economic contraction, according to the British Retail Consortium (BRC).