Global fashion giants deliver mixed FY24 results

Moderate: Growth in Either Sales or Profits

Boot Barn Holdings Inc (NYSE: BOOT)

California-based Boot Barn is a lifestyle retailer of western and work-related footwear, apparel, and accessories for men, women, and children. The retailer reported its fourth quarter and full fiscal 2024 financial results in mid-May.

The company’s Q4 and FY24 ended on March 30, 2024, comparable to the 14-week and 53-week period ended on April 1, 2023, respectively. In the quarter, net sales decreased by 8.7 per cent compared to the previous-year period, to $388.5 million, and by 2.2 per cent excluding the sales in the 14th week of last year. Net income in the quarter reduced to $29.4 million from $46.4 million.

On a yearly basis, net sales of $1.667 billion increased marginally by 0.6 per cent, while excluding $28.3 million of sales from the 53rd week of the previous year, the increase was 2.3 per cent. Net income, inclusive of the non-cash partial impairment, was $147 million or $4.8 per diluted share, compared to $170.6 million or $5.62 per diluted share in the prior year.

Currently, Boot Barn operates over 400 stores in 45 states of the US, as well as three e-commerce sites: Boot Barn, Sheplers, and Countryoutfitter. The company opened 55 new stores during the year, including 18 in the fourth quarter alone.

For FY25 ending March 29, 2025, the company expects total sales of $1.766 billion to $1.800 billion, representing 5.9 – 8 per cent growth over FY24. With a plan to open 60 new stores, the gross profit is expected to stay between $647.2 million and $664.1 million, or 36.6 to 36.9 per cent of sales. Targeting SGA expenses in the range of $458.9 million to $463.4 million, the net income is expected to be between $140.2 million and $149.3 million. The company also estimated first quarter FY25 sales to be $399 – $407 million, growing 4 per cent, and income from operations to be between $38.7 million and $41.2 million.

Gunze Ltd (TYO: 3002)

Japanese fashion company Gunze Ltd ended FY24 on March 31, 2024, and reported consolidated financial performance in mid-May. Net sales of ¥132,885 million ($846.31 million) declined by 2.3 per cent compared to the previous year. However, all profit metrics, including operating profit (¥6,777 million or $43.66 million), ordinary profit (¥6,774 million or $43.14 million), and profit attributable to owners of the parent (¥5,109 million or $32.54 million), increased by 16.6 per cent, 12.5 per cent, and 13.5 per cent, respectively.

The decline in net sales on a consolidated basis was attributed to the previous fiscal year’s transfer of the film business in the electronic components field and a real estate development project. Operating profit and ordinary profit increased primarily owing to improved profitability in the apparel business. The apparel business recorded net sales of ¥60,114 million or $382.85 million (down 1.4 per cent year-on-year) and an operating profit of ¥1,465 million ($9.33 million), compared to an operating loss of ¥222 million ($1.41 million) in the previous fiscal.

For FY25 (April 1, 2024, to March 31, 2025), the company forecasts consolidated net sales of ¥140,000 million ($892 million), operating as well as ordinary profits of ¥9,000 million ($57.32 million), and profit attributable to owners of the parent of ¥7,500 million or $48 million.

Weak: No Growth in Sales & Profits

Burberry Group Plc (LON: BRBY)

In mid-May, the London-headquartered fashion company Burberry Group Plc announced preliminary results for the 52 weeks ended March 30, 2024, comparable to the 52 weeks ended April 1, 2023. The financial results reported weak performance, with revenue (£2.968 billion or ~$3.777 billion vs. £3.094 billion or ~$3.938 billion in FY23) remaining flat in constant exchange rates and declining by 4 per cent on a reported basis. Comparable store sales declined by 1 per cent, with a robust H1 in 2024 up by 10 per cent but later offset by an 8 per cent decline in a challenging H2, FY24. The adjusted operating profit of 15.5 per cent in constant exchange rates and 14.1 per cent on a reported basis, respectively, declined by 25 per cent and 34 per cent. The company generated free cash flow of £63 million, spent £208 million on CAPEX mainly for new or refurbished stores, completed a £400 million share buyback during the year, and proposed a full-year dividend of 61.0p.

Among non-financial priorities for FY25, Burberry Plc aims to refine brand expression, build out a full product offer while ensuring a balance between seasonal and core collections, enhance both offline and online retail experiences, focus on conversion, rationalise the wholesale channel in EMEIA to further increase control of distribution, drive cost efficiencies, and advance its sustainability agenda.

The FY25 outlook expects H1 to remain challenging, with the company reaping the benefits of its actions in H2. Wholesale revenue is estimated to fall by around 25 per cent in the first half, as the company works to increase control of distribution. The balancing of investment in consumer-facing areas with disciplined cost control to support growth ambition will continue. The company plans to offset inflation in H2 through identified cost savings. Based on foreign exchange rates effective as of April 25, 2024, a currency headwind of £30 million to revenue and £20 million to adjusted operating profit should be expected in FY25.

VF CORPORATION (NYSE: VFC)

Denver-based VF Corp reported weak financial performance in the fourth quarter and full FY24, ending March 30, 2024, on May 22, 2024.

The quarter’s revenue of $2.4 billion was down 13 per cent, and the annual revenue of $10.5 billion was also down by 10 per cent (11 per cent in constant currency). In Q4, both The North Face and Vans were down by 5 per cent and 26 per cent respectively. The reported and adjusted gross margin of 48.4 per cent was down 120 basis points; the operating margin of 15 per cent was down 910 basis points; and the adjusted operating margin (2.1 per cent) was down 770 basis points.

Founded in 1899, VF Corporation is one of the world’s largest apparel, footwear, and accessories companies, offering a family of iconic outdoor, active, and workwear brands including Vans, The North Face, Timberland, and Dickies.

On a full-year basis, both the gross margin of 52 per cent and the adjusted gross margin of 52.1 per cent were down 50 basis points. Adjusted gross margin benefits of 90 basis points from a favourable mix were more than offset by 140 basis points of an unfavourable rate, which included 100 basis points of negative transactional foreign currency impacts. The downward trend continued in the operating margin of 0.3 per cent, which fell 310 basis points, while the adjusted operating margin (5.6 per cent) was down 420 basis points. At the same time, the company generated gross cost savings through Reinvent of ~$80 million and incurred ~$105 million of related charges in the reported fiscal. Adjusted EPS was $0.74 vs. $2.10 in FY23.

Fibre2Fashion News Desk (WE - SB)