When Less is More
“If we narrow our offering, won’t we narrow our opportunities for profit?
Answer: Not necessarily.
It’s often better to be number one in a small category than to be number three in a large one.”
– Marty Neumeier, author of The Brand Gap
FINANCE
Alibaba (China) reported Q3 revenue rose 5% to RMB 260.35 billion ($36.7 billion). Revenue from Taobao and Tmall grew 2% to RMB 129.1 billion ($18.2 billion). However, operating income for the group fell 36% to RMB 22.51 billion ($3.2 billion).
Ralph Lauren (USA) reported Q3 revenue increased 6% to $1.9 billion. Operating income rose 12.8% to $318 million. Revenue in Asia rose 16%, Europe +11% and N. American revenue was flat.
Tapestry (USA) reported Q2 2024 revenue rose 3% to $2.1 billion. Operating income grew 7% to $448 million. International sales rose 12%, with a 19% increase in Greater China, followed by 11% growth in Europe.
Adidas (Germany) expects to hit $542 million in operating profits this year, less than half the average analyst estimate. The brand hopes to make up for some of that by selling its remaining Yeezy inventory, which it expects to sell off at cost, generating an estimated €250 million ($270 million), per Bloomberg.
VF Corp (USA) reported Q3 revenue fell 16.1% to $2.96 billion. The company showed an operating loss of $32 million, compared with an operating profit of $516 million a year ago. For the first nine months of the year, operating profits fell 34% to $321.7 million. Revenue during the 9 months fell 8.9% to 8.08 billion.
- Revenue for The North Face fell 10% during the quarter, but was up 4% for the first nine months of the year.
- Overall sales in APAC were up 26%, with sales in Greater China up 31%.
Simon Property (USA) said that for the quarter ended December 2023 revenue was up 9.1% to $1.53 billion. US mall and premium outlet occupancy was 95.8%, an increase of 90 basis points from 94.9% a year ago.
For the full year, revenue rose 6.9% to $5,658 million. Net income was up 6.7% to $2,283 million.
Under Armour (USA) reported Q3 net income fell 6.1% to $114 million. Revenue fell 6% to $1.49 billion. During the quarter, Under Armour’s wholesale revenue, which accounts for about 60% of sales, dropped 13% to $712 million. Director to consumer rose 4% to $741 million.
Capri Holdings (UK) reported Q3 revenue fell 5.6% to $1.43 billion. Revenue decreased for each of its brands. Operating income fell to $122 million (8.5%), from $236 million (15.6%) a year ago. Net income fell 53% to $105 million.
Kering (France) reported annual operating profits fell 15% to €4.7 billion ($5.1 billion). Operating margins contracted to 24.3% in 2023, from 27.5% in 2022.
Revenue fell 4% to €19,566 million ($21,091 million) for the full year, falling 6% in the fourth quarter of the year. Sales were down for all brands.
PODCAST
Harnessing AI to Boost Customer Engagement
One of the core use cases for AI in marketing is to help companies better understand their customers – at a more granular level.
The goal is to gain deeper insights into what customers want so that brands can tweak their marketing so that it resonates with what matters most to their target market.
In this podcast Nick Bond, Founding Partner and Head of Product at Apex, an AI-driven solution talks about using insights from customer research to identify how aligned a brand is with the desires of their customer.
You’ll Learn:
- The importance of analyzing a customer’s behavior for clues as to how they are engaging with your brand.
- How AI and automation are changing the face of marketing.
- How to turn your customers into brand ambassadors.
BRAND ANALYSIS
GU Wins By Sticking to Its Own DNA
Most brands believe that to win GenZ consumers they need to go head-to-head with fast fashion brands like Shein or Primark, with rock bottom prices and an almost limitless stream of new styles.
GU, the younger sibling of Uniqlo, has proven them wrong.
The brand is affordable, but not as cheap as its competitors. And it leans towards more toned down styles – which are rolled out at much less frequent pace.
Yet, GU is on a strong growth trajectory – with big goals for global expansion. Read more
MARKETS
US CEOs’ feelings about the economy are at a two year peak, according to the results of a Conference Board survey that measures sentiment among business leaders.
- The biggest challenge they face domestically this year is political uncertainty ahead of the U.S. elections, per the survey results.
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