Week in Review

June 12, 2022

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Week in Review | Jun 11, 2022

In the beginning of the year retailers raced to ramp up inventories to ensure they had enough inventory.

Now a growing number are now becoming increasingly concerned about how they are going to move all those goods as consumers start to cut back spending.

FINANCE

Inditex (Spain) reported total sales rose to $7.04 billion in the three months to April 30. Store traffic rose 36%, offsetting a 6% decline in online sales.

Pre-tax profits rose 82% to $1,040 million.
May sales rose 17% year-on-year.
The company expects prices to rise by “mid-single digits” over the summer in markets due to inflation.

Jill (USA) reported Q1 net income totaled $14.4 million, compared to net loss of $18.3 million in the year-ago quarter. Net sales rose 21.7% year-on-year.

Woven tops and dresses were the two stand-out categories as consumers returned to pre-pandemic life.

Chicos FAS (USA) reported Q1 net income of $34.9 million, compared to a loss of $8.9 million last year. Same-store sales growth of 40.6%, along with higher average dollar sales, help get the brand back to profitability.

Net sales rose 39.4% to $540.9 million

Gucci (Italy) expects sales to increase by 50% as it opens stores and raises prices. Sales reached $10.3 billion last year and parent company Kering told investors yesterday this would rise to almost $14.9 billion over the medium term.

Kering has also upgraded its targets for Yves Saint Laurent, saying it will double sales to more than £4 billion.

Express (USA) reported a net loss of $11.9 million for the quarter ended April 30, an improvement over the loss of $45.7 million last year.

Sales rose 30% to $450.8 million.

Stitch Fix (USA) reported Q3 net sales fell 8% year over year to $492.9 million. Its number of active clients fell by 200,000 or 5% year-on-year.

Net loss widened to $78 million, from an $18.8 million loss a year ago.

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Making Sense of What’s Happening in the Markets

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How have markets changed over the past decades – and what actually hasn’t changed?

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MARKETS

The Bank of England is set to raise interest rates for a fifth consecutive time next week, with policymakers split over whether to accelerate the pace of monetary tightening to combat racing inflation.

The European Central Bank committed to raising its primary interest rate, currently negative 0.5%, by a quarter-point next month. An even bigger hike is on the table for fall, pushing interest rates above zero for the first time in a decade.

China is launching a massive bailout fund expected to exceed $100 billion dollars by September to manage the contingency of an expected economic slowdown.