After a strong holiday season, there’s growing concern that Q1 spending on apparel and other consumer goods could be weaker than expected.
RETAIL
American retail sales have suffered their largest drop in ten months.
- December retail sales declined by 1.9% month-on-month, according to the US Census Bureau. Adjusting for inflation, sales fell 3.4%, according to Oxford Economics.
- The decline was attributed to consumers shopping earlier on concerns over supply chain-related shortages.
UK retailers have said the soaring cost of living risks dragging down high street sales in 2022 after a bumper Christmas trading period and year of recovery in consumer spending, according to the British Retail Consortium.
- Total retail sales rose by 2.1% year-on-year in December and were up 4.6% over 2019.
- Full year 2021 sales grew by 9.9% compared with 2020, and by 6.6% compared with 2019.
FINANCE
“It’s time to review and increase prices of some items as we face higher costs of materials, logistics and weaker yen. Our baseline is trying not to raise prices as much as possible. It will be extremely limited.” – Takeshi Okazaki, CFO, Fast Retailing (at an earnings briefing)
Fast Retailing (Japan) reported revenue for Q1 2022 reached $5.5 billion (¥627.3 billion), up 1.2% year-on-year.
- Income before tax was $1. 7 billion (¥134 billion), up 25.2% year-on-year.
- For the full year ending Aug 2022, revenue is forecast at $19.26 billion (+3.1%), with income reaching $2.36 billion (+1.6%)
Lululemon Athletica (Canada) said that its revenue and earnings would be ‘toward the low end’ of expectations in the three months to the end of January. The company warned that Omicron-related supply chain and staffing issues had reduced sales.
FatFace (UK) is back on track after sales rose 3% during the 5-week festive period compared with the same period in 2019.
Citi Trends (USA) said total sales increased 20.1% to $204.8 million for the nine-week holiday period ended Jan. 1. Comparable store sales increased 14.8%.
- The retailer plans to open 45 new stores this year, with plans to have 1,000 stores by 2024. Currently it operates 602 stores.
- Full year 2021 total sales to be in the range of $990.0 million to $995.0 million, up 26.9% over 2019.
JD Sports (UK) has upgraded its annual profit predictions for the second time in four months to at least £875 million for the year ending January 29. The group expects similar profits for the coming year.
American Eagle Outfitters (USA) to reach $5.8 billion in annual revenue in fiscal 2023.
- The retailer expects to reach $800 million in operating income in fiscal 2023.
- Operating margins are expected to increase to $13.5% from 10.0%.
Quiz (UK) has revealed a massive boom in store trade over the festive period despite Covid restrictions affecting sales of partywear. Total sales rose 20% year-on-year to £8.8million in December.
PODCAST
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Businesses have come to respect the needs of employees who have babies or young children, special needs, mental health challenges or even financial issues.
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MARKETS
The US, France, UK, Denmark and Sweden are among the wealthier countries to have recovered all the lost ground during the pandemic while Germany, Italy and Spain have yet to pass the pandemic milestone.
US inflation scaled new multi-decade highs last month as policymakers scrambled to curb surging prices. Consumer prices rose 7% year-on-year in December.
UK households have suffered the sharpest fall in the amount of cash they have available to spend for almost eight years, amid a worsening cost of living crisis driven by high inflation and rising energy bills, according to insurer Scottish Widows.
- Young adults have been the hardest hit with 47% saying they “were unable or just about managing to make ends meet each month.”
- The UK economy had surpassed its pre-pandemic level for the first time in November ahead of the rapid spread of the Omicron variant, per the Office for National Statistics
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