2.8 C
Munich
Saturday, April 20, 2024

Global fashion retailers’ full year performance ending January 2023

Must read

[ad_1]

Starting their new fiscal (FY23) in February 2023, the 10 companies which reported, up till March 13, 2023, their last quarter and full year (FY22) performance along with outlook for next financial year, are covered in this feature.

The results of fashion retail companies are segregated as strong, moderate and weak based on their sales and profitability during the period. While most companies fared badly, only few managed to show growth on qualifying metrics.

Ten fashion retailers reported their last quarter and full year (FY22) performance early this month. Florida-based Chico’s FAS and Seattle-based Nordstrom showed growth in both sales and profitability. Ross Stores, Inc, Macy’s Inc, and Kohl’s Corp were among the companies that ended the fiscal with both sales and profitability in the negative.

STRONG – Growth in both sales and profitability

CHICO’S FAS INC. (NYSE: CHS)

Founded in 1983, Florida-based Chico’s FAS is a fashion company owning three brands: Chico’s, White House Black Market and Soma. The company’s Q4 and full year result announced in February-end reported net sales of $524.1 million and $2,142 million, respectively. While quarter grew 5.6 per cent in sales ($496.3 million in previous year’s Q4), the fiscal sales increased 18.3 per cent from $1,809.90 million in FY21. The fiscal sales increase was driven by an increase in transaction count and average dollar sale. The fourth quarter gross margin was $182.9 million (34.9 per cent of net sales) compared to $171.3 million (34.5 per cent of net sales) in 2021; fiscal gross margin was $838 million (39.1 per cent of net sales) compared to $664 million (36.7 per cent of net sales) in the prior year. The gross margin rate increase reflected occupancy leverage, higher average unit retail and lower inbound air freight, partially offset by higher raw material costs.

The company expects consolidated net sales in the first quarter of 2023 to be $535-550 million; gross margin rate to remain between 32.8-33.3 per cent of net sales; and diluted EPS to range between $0.26 to $0.30. The company is projected to end full-year 202 with $2,2220-2,250 million in sales, registering 39.4 per cent to 39.8 per cent of gross margin rate. Earnings per diluted share is expected to stay between $0.79 to $0.91.

NORDSTROM, INC. (NYSE: JWN)

Another American retailer to report Q4 and full year closing early March was Seattle-based Nordstrom – the luxury department store chain that offers designer clothing and footwear, cosmetics and home goods. For the fiscal year ended January 28, 2023, net earnings were $245 million and diluted EPS was $1.51, with EBIT of $465 million or 3.1 per cent of sales. Net sales including revenue from credit card rose to $15,530 million from $14,789 million (as of January 29, 2022) last fiscal, and net earnings of $245 million this year was 37 per cent up from $178 million of last year.

With the company announcing discontinuation of its Canada business operations, the impact has been factored-in for fiscal 2023 outlook that also includes a 53rd week. Revenue is expected to decline 4-6 per cent versus fiscal 2022, EBIT margin will be 1.2-2.1 per cent of sales, adjusted EBIT margin is projected to be in the range of 3.7 to 4.2 per cent (excluding impact of Canadian business shut down) of sales. EPS is expected between $0.20 and $0.80, and adjusted EPS (excluding Canada impact) will be $1.80 to $ $2.20.

MODERATE – Growth in either sales or profitability

DILLARD’S, INC. (NYSE: DDS)

1938-founded Dillard’s, Inc is American fashion retailer of apparel, beauty and home collections – operating 250 locations and 32 clearance centres spanning 29 states, as well as an online store. In its full fiscal 2022 reporting, the company’s sales grew 5.8 per cent from $6.493 billion (52-week ended January 29, 2022) to $6.871 billion (52-week ended January 28, 2023) – including the operations of company’s construction business, CDI contractors, LLC, which if excluded, represents retail sales figures of $6.702 billion (FY22) and $6.375 billion (FY21) – a 5.1 per cent growth. Sales in comparable stores grew 5 per cent. The consolidated gross margin for FY22 was 42 per cent of sales against 42.3 per cent a year earlier, the respective retail gross margin rate (excluding CDI) for FY22 and FY21 were 43 per cent and 42.9 per cent of sales. The net income figure of $891.6 million (2022; $50.81 per share) growing over $862.5 million (2023; $41.88 per share) included varied tax benefits amounting to $94 million – reflecting a circumstantial increase.

Retail expansion in 2023 will feature a 140,000 sq ft new store at The Empire Mall in Sioux Falls, South Dakota in the spring of February 2024 – taking the count of states with Dillard’s presence to 30, while three locations will be shut down during Q1, 2023. Except certain financial statement items (expenses) for the 53-week period ending February 3, 2024, the company did not release any expectation on sales and gross margin for new fiscal.

WEAK – Growth neither in sales nor in profitability

AMERICAN EAGLE OUTFITTERS, INC. (NYSE: AEO)

American Eagle Outfitters, a global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under American Eagle and Aerie brands, announced its Q4 and full FY22 results with 2023 outlook on March 1, 2023.

During the year, total net revenue was $5 billion – flat to last fiscal – with supply chain business, Quiet Platforms, contributing approximately 3 percentage points to revenue growth. Among brands, Aerie rose 9 per cent to $1.5 billion and American Eagle declined 8 per cent to $3.3 billion compared to FY21. Both consolidated store and digital revenues declined 2 per cent and 7 per cent, respectively. Annual gross profit of $1.7 billion (35 per cent of revenue; 39.7 per cent in 2021) decreased 12 per cent due to lower merchandise margin primarily reflecting higher markdowns, with higher distribution and warehousing costs, and higher rent also pressurising margins. This resulted in operating income of $269 million (5.4 per cent of revenue).

The company has entered 2023 cautiously with the healthy inventory, and expects the first quarter revenue in the range of flat to up low-single digits with operating income almost flat to last year. For full year also, the annual revenue is projected in the range of flat to up low-single digits, while operating income is expected to be in the range of $270 to $310 million, compared to $269 million in 2022.

BURLINGTON COAT FACTORY (NYSE: BURL)

An off-price retailer of high-quality, branded apparel, footwear, accessories and home merchandise Burlington Stores – a division of Burlington Coat Factory, announced its result for fourth quarter (FY22) ended January 28, 2023. For full 2022, total sales decreased 7 per cent compared to previous fiscal. Net income decreased 44 per cent ($179 million) to $230 million or $3.49 per share which was $6.00 per share in FY21 – a decrease of 42 per cent.

Moving into 2023, the New Jersey-headquartered company expects first quarter sales to increase 12-14 per cent, assuming comparable store sales to increase 5-7 per cent on Q-to-Q basis; and, adjusted EPS in the range of $0.85-0.95 as compared to $0.54 in last year. For full FY23, total sales are also expected to increase 12-14 per cent; adjusted EBIT margin to increase approximately 80-120 basis points; and adjusted EPS to stay in the range of $5.50 to $6.00. The company plans to open 70-80 new stores in FY23.

CARTER’S INC. (NYSE: CRI)

The largest branded marketer of young children’s apparel in North America, Carter’s reported its full fiscal decrease of $273.7 million or 7.9 per cent in consolidated net sales of $3.2 billion, with its US retail declining 11.5 per cent, wholesale 4.1 per cent and international sales 1.9 per cent. Net income in FY22 decreased $89.7 million or 26.4 per cent to $250 million, compared to $339.7 million in FY21, translating into 18.8 per cent decrease in diluted EPS to $6.34 ($7.81 in FY21).

The first quarter projection for 2023 includes $630 to $650 million in net sales; an adjusted operating income of $30 to $40 million; and adjusted diluted EPS in the range of $0.35 to $0.55. For full 2023, the company is expecting net sales of $3 billion, adjusted operating income of $350 million and adjusted diluted EPS at $6.15 based on assumptions that inflationary pressure on consumer demand will continue, second half sales performance would improve, inbound freight and product costs would moderate, and, gross margin expansion would be driven by improved price realisation and lower costs.

DULUTH HOLDINGS INC. (NASDAQ: DLTH)

A lifestyle company of men’s and women’s casual wear, workwear and accessories Duluth Holdings Inc ended its financial year on January 29, 2023 with net sales of $653.3 million compared to $698.6 million in the prior fiscal. The gross profit of $377.3 during last fiscal ended January 30, 2022 decreased to $343.4 million in this fiscal. Net income also declined from $28,550 million to $2,246 million for the compared period.

Included in other developments during the year were expansion of AKHG sub-brand with the introduction of women’s collection and strategic investments to re-platform website with next generation of e-commerce architecture.

In 2023 outlook, the company expects net sales in the range of $645-660 million; adjusted EBITDA in the range of $47-49 million; and EPS to stay in the range of $0.02-0.08 per diluted share.

KOHL’S CORP. (NYSE: KSS)

With more than 1,100 stores in 49 states and the online convenience of Kohls.com and the Kohl’s App, Kohl’s Corp is an omnichannel retailer that offers choice for the active and casual lifestyle. The company performed weak in both its quarter as well fiscal performance. Comparing the 52-week period ending on January 28, 2023 to the 52-week period ending January 29, 2022, Kohl’s net sales declined 7.1 per cent y-o-y to $17.2 billion, with comparable sales down 6.6 per cent. Gross margin declined 485 basis points as a percentage of sales to 33.2 per cent as SG&A expenses rose 2 per cent y-o-y to $5.6 billion (30.9 per cent of sales). Net loss reported was $19 million (or $0.15 per diluted share. This compares to net income of $938 million or $6.32 per diluted share, and adjusted net income of $1.1 billion or $7.33 per diluted share, in the prior year.

For full 2023, the decrease is expected to continue with net sales to be down 2-4 per cent, including the impact of the 53rd week which is worth approximately 1 per cent y-o-y. The operating margin is expected to be around 4 per cent, and diluted earnings per share in the range of $2.10-2.70, excluding any non-recurring charges.

MACY’S INC. (NYSE: M)

Macy’s Inc, the retailer that works in the off-price-to-luxury space for apparel, home, beauty and accessories and owns brands like Macy’s, Bloomingdale’s and Bluemercury, reported last quarter and full-year 2022 result early March. The last quarter saw 4.6 per cent shortfall in net sales compared to same quarter last year, with gross margin also falling to 34.1 per cent from 36.5 per cent for comparable period. Full-year net sales of $24.4 billion was 0.1 per cent below 2021 – digital sales plunged 6 per cent while store sales rose 3 per cent. There was a 4 per cent decrease reported in 42.7 million customers shopping the Macy’s brand, however, Bloomingdale’s and Bluemercury’s customers increased 5 per cent and 12 per cent, respectively, compared to last year. The company also lost on gross margin front with figures changing from 38.9 per cent last year to 37.4 per cent this year. Diluted and adjusted diluted earnings per share reported were $4.19 and $4.48, against $4.55 and $5.31 in 2021.  

ROSS STORES, INC. (NASDAQ: ROST)

Ross Stores, Inc is an S&P 500, Fortune 500 and NASDAQ 100 company, headquartered in Dublin, California. It offers branded and designer apparel, accessories, footwear and home fashion through its “Ross Dress for Less” off-price stores. The company’s fiscal year ending on January 28, 2023 reported EPS of $4.38 on net income of $1.5 billion, compared to $4.87 per share on net earnings of $1.7 billion in 2021. Sales for 2022 were $18.7 billion versus $18.9 billion in fiscal 2021, with comparable store sales down 4 per cent versus a robust 13 per cent increase in the prior year.

For the 52-week ending January 27, 2024, the comparable store sales are expected to be relatively flat versus a 4 per cent decline and 13 per cent gain in 2022 and 2021, respectively. Accordingly, the EPS for 53 weeks ending February 3, 2024 is expected to be $4.65 to $4.95, compared to $4.38 in fiscal 2022.

Fibre2Fashion News Desk (WE – SB)

[ad_2]

Source link

- Advertisement -spot_img

More articles

- Advertisement -spot_img

Latest article