Nordstrom, Dick’s, DSW and more – Footwear News
This week, some of the biggest players in the footwear industry – from Nordstrom department store to sports chain Dick’s Sporting Goods – reported earnings and sales results for their final quarter.
The financial figures were revealing: taken together, they revealed trends that have recently circulated in retail, as well as the impact of fiscal stimulus, vaccine roll-out and pent-up demand on their balance sheets.
Here, FN brings together four takeaways from the last week of results.
Record quarterly performance
Companies that have struggled to make gains amid the health crisis as well as those that have ridden the active and outdoor waves induced by the pandemic have produced impressive quarterly results.
Designer Brands Inc., for example, has returned to profitability for the first time since the start of the COVID-19 epidemic, posting better than expected revenues and earnings. In a statement, CEO Roger Rawlins explained that “the company’s success was driven by green shoots in areas of the business that had previously been affected by the pandemic; synergies from our vertical capabilities materializing, allowing us to capitalize on positive trends faster than ever; and our assortment strategy focused on athletics, children and seasonal products. “
Separately, Dick’s Sporting Goods Inc., whose business appeared pandemic-proof thanks to strong omnichannel capabilities and a stronghold balance sheet, reported an explosive first quarter with highest profits ever. as well as a 115% spike in his comps. “We’re on the right track right now, and 2021 will be our boldest and most transformative year in company history,” said Executive Chairman and Chief Merchandising Officer Ed Stack.
Consumers are splurging again
Favorable macroeconomic factors contributed to a rebound in luxury sales, which suffered early in the pandemic as shoppers retreated indoors, a work-from-home culture took hold and spending passed. from discretionary goods to essential goods.
However, as evidenced by the financial report of Capri Holdings Ltd., a recovery in the sector is on the horizon. Parent Jimmy Choo, Michael Kors and Versace posted a strong profit beating and offered a positive outlook for the year, although a good chunk of its bricks and mortar fleet remains closed. “Looking ahead, we remain optimistic about the outlook for the luxury fashion industry and Capri Holdings,” added Chairman and CEO John Idol.
Repeated or flat outlook
A few retailers saw their inventories drop following the release of financial reports that included a restored or stable outlook for the coming quarter or full year.
In the case of Nordstrom Inc., shares fell after-hours on Tuesday after posting lower-than-expected profits and reiterating its forecast for fiscal 2021. It forecasted a gain of more than 25% in revenue, with its EBIT margin (or earnings before interest and taxes) projected at around 3% of sales. In contrast, some of its department store rivals like Macy’s Inc. and Kohl’s Corp. recently raised their forecasts.
In contrast, Caleres started the year with a stronger quarter than expected. While CEO Diane Sullivan said the company was “increasingly optimistic” about its ability to return to 2019 profit levels in the second half of the year, she expected second quarter sales to be in between $ 625 million and $ 650 million – effectively stable in the first quarter. Its shares are down after hours.
Supply chain disruptions
A number of companies – including Burlington Stores Inc., Genesco Inc. and Hibbett Sports Inc. – have lamented constraints in their supply chains, which have faced disruption from continued congestion at ports.
While Hibbett CEO Mike Longo noted that the problem at the docks limited his ability to build up inventory during the first quarter, Michael O’Sullivan, Burlington CEO, suggested that headwinds in the matter of expenses will likely weigh on the operating margin for the year. “
Additionally, for Genesco, CEO Mimi Vaughn told analysts on the company’s conference call that the situation was “difficult” – but the “good news is that things have improved.” She said the retail group will “catch up well” in the second quarter and expects to be “in good shape” by the end of the third quarter.