Week in Review

May 29, 2022

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Week in Review | May 29, 2022

Department stores are back in fashion showing strong Q1 financial results. Brands and discounters are suddenly facing a tougher market.

FINANCE

“We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods.” – Jeff Gennette, chairman and CEO, Macy’s

Nordstrom (USA) reported net earnings reached $20 million for the quarter ended April 30, compared to a loss of $166 million a year ago.

Net sales rose 18.7% to $3.47 billion, exceeding pre-pandemic levels.
Nordstrom banner net sales increased 23.5%, Nordstrom Rack net sales rose 10.3%.
The retailer raised its annual forecast for sales growth to 6% to 8%, up from its previous target of 5% to 7%.

Macy’s (USA) reported Q1 net income increased 177% to $286 million, from $103 million a year ago.

Revenue increased nearly 14% to $5.35 billion.
Dresses, women’s shoes, accessories and men’s tailored apparel showed strong sales.

Abercrombie & Fitch (USA) posted a net loss of $16.5 million for the quarter ended May 1, compared to net income of $41.8 million a year ago.

Sales rose 4% to $812.8 million from $781.4 million, beating analysts’ estimates.
For Q2 the company expects a low single-digit sales decline. For the full year the retailer expects sales to be flat to up 2%.

Ralph Lauren (USA) reported Q4 profit reached $24.4 million compared with. -$74.1 million a year ago.

Sales in Q4 rose 18% to $1.5 billion.
Full year profit reached $600.1 million, on revenue of $6.22 billion.

The Children’s Place (USA) reported Q1 net sales fell 17% to $362.4 million. Net sales were down 12.1% compared with Q1 2019.

Net income fell 44% to $19.8 million
The company is now forecasting a mid-single digit decline in sales for 2022.

Footlocker (USA) reported Q1 net income fell 32% year-on-year to $133 million.

Total sales increased by 1% to $2.17 billion, however same-stores sales fell 1.9%.

Chanel (France) posted record sales of $15.6 billion for the year to the end of December 2021. Operating profit hit a record $5.5bn, more than double a year ago, and up 58% from 2019.

US sales were up nearly 80% year-on-year to $3.5 billion.

Next (UK) will remain ‘resilient’ despite pressure on costs and the consumer, according to S&P Global analysts.

Boohoo (UK) is working on a pre-pack rescue deal to buy Missguided, its financially stricken rival.

Dollar Tree (USA) reported Q1 net income increased 43.2% to $536.4 million.

Net sales rose 6.5% to $6.9 billion, topping estimates of $6.76 billion.
Dollar Tree also completed its conversion to the $1.25 price point (previously $1.00).

Express (USA) reported Q1 sales rose 30% to $450.8 million. It reported a net loss of $11.9 million, an improvement from a loss of $45.7 million a year ago.

Express raised guidance for same-stores to increase 8%-10%, from previous estimates of 7%-9%.

Dick’s (USA) reported Q1 net sales fell 7.5% to $2.7 billion. Net income fell 28% to $260.6 million.

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RETAIL

Cotton On (Australia) is planning to open 17 new stores in the US.

Kohl’s (USA) is planning to open 100 new small format stores – of about 35,000 sq. ft., instead of the typical 80,000 sq. ft. format.

Amazon (USA) has opened Amazon Style, its first physical apparel store – a 30,000-sq.-ft., two-level store in Los Angeles. The store uses machine-learning technology to help customers find clothes and personalize recommendations.

MARKETS

The U.S. Federal Reserve is set to continue raising interest rates aggressively until the autumn as policymakers try to bring runaway US inflation under control.