Mixed performances of global Fashion Giants in Q3, FY24 & FY23

WEAK: NO GROWTH EITHER IN SALES OR PROFITS

Carter’s Inc (NYSE: CRI)

Listed on the New York Stock Exchange, Carter's, Inc announced its fourth quarter and full-year 2023 performance results on February 27, 2024. The Atlanta-headquartered company is the largest branded marketer of young children's apparel in North America.

In Q4 2023, net sales decreased by $54.3 million (5.9 per cent) to $857.9 million compared to $912.1 million in the same quarter of the previous year, owing to macroeconomic factors including inflation, higher interest rates, and consumer debt levels, and the uncertain probability of a recession negatively affecting consumer demand.

On a full-year basis, consolidated net sales decreased by $267.1 million (8.3 per cent) to $2.95 billion year-on-year, with macroeconomic factors weighing down throughout the year. Sales in the US Retail (-10.6 per cent) and Wholesale (-6.1 per cent) segments, international segment (-5.1 per cent), and US Retail comparable net sales (-12.2 per cent) all declined. Operating income decreased by 14.7 per cent to $323.4 million, and net income decreased by $17.5 million (7 per cent) to $232.5 million compared to $250 million in 2022.

On February 24, 2024, the company declared a 7 per cent increase in its quarterly cash dividend to $0.80 per share, to be paid on March 29, 2024, to shareholders of record at the close of business on March 11, 2024.

In its full fiscal 2024 outlook, the company expects low single-digit growth in net sales to approximately $3 billion, mid-single-digit growth in adjusted operating income and diluted EPS, and operating cash flow in excess of $250 million.

Dillard’s Inc. (NYSE: DDS)

Arkansas-headquartered and founded in 1938, Dillard's, Inc is an American fashion retailer of apparel, beauty, and home collections. On February 26, 2024, the NYSE-listed fashion company announced its operating results for the fourth quarter (14 weeks) and full year (53 weeks) ended February 3, 2024, following the 4-5-4 retail reporting calendar, which included an extra week in Q4 2023. The results were compared to the 13 and 53 weeks ended January 27, 2024, and January 28, 2023, respectively.

The quarter's results included a 5 per cent decline in both total retail sales and comparable store sales, and a drop in net income from $289.2 million in Q4 2022 to $250.5 million.

For the full 2023 fiscal, net sales for the 53 weeks ended February 3, 2024, and the 52 weeks ended January 28, 2023, were $6.752 billion and $6.871 billion, respectively. Consolidated gross margin was 40.3 per cent of sales, compared to 42 per cent of sales. For the 52-week to 52-week period, total retail sales decreased by 5 per cent, and comparable store sales decreased by 4 per cent. Net income dropped to $738.8 million compared to $891.6 million in 2022.

Macy’s Inc. (NYSE: M)

Headquartered in New York City, Macy's, Inc offers a comprehensive digital and nationwide footprint through its three iconic brands--Macy's, Bloomingdale's, and Bluemercury. On February 27, 2024, it reported financial highlights for the 14-week fourth quarter of 2023, with net sales of $8.1 billion registering a decline of 1.7 per cent versus the fourth quarter of 2022. Digital sales were down 4 per cent, while sales in brick-and-mortar stores remained flat.

Additionally, reporting full-year financial results (53 weeks in 2023 and 52 weeks in 2022), the net sales of $23.1 billion were down 5.5 per cent versus $24.4 billion from the previous year – digital sales dropped 7 per cent and brick-and-mortar sales decreased by 5 per cent. However, comparable sales, on a 52-week basis, were down 6.9 per cent on an owned basis and down 6.0 per cent on an owned-plus-licensed basis versus 2022.

Gross margin for the year improved to 38.8 per cent ($8,949 million), up from 37.4 per cent ($9,136 million) in 2022, largely due to lower clearance markdowns and improved freight costs, partially offset by changes in category mix and elevated shortages but declined in value terms.

The full-year 2024 guidance expects net sales to remain between $22.2 billion and $22.9 billion and adjusted diluted EPS to be in the range of $2.45 to $2.85.

Qurate Retail, Inc. (NASDAQ: QRTEA, QRTEB, QRTEP)

Qurate Retail, Inc is a Fortune 500 company comprised of six leading retail brands—QVC, HSN, Ballard Designs, Frontgate, Garnet Hill, and Grandin Road. Its retail business reaches millions of customers via its QVC+ and HSN+ streaming experience, websites, mobile apps, social pages, print catalogues, and in-store destinations. The Englewood (Colorado)-headquartered company announced its fourth quarter and full-year 2023 results on February 28, 2024.

Calling 2023 a transformational year, the company claimed to have executed better on multiple fronts, including merchandising, pricing strategy, and inventory management. These efforts yielded significant, positive results in the company's operational health and financial performance. There was increased free cash flow generation, substantial debt reduction, and an optimised portfolio with the divestiture of Zulily. In the fourth quarter, adjusted OIBDA grew over 70 per cent on a reported basis.

In Q4 2023, the revenue decreased by 4 per cent, and full-year revenue decreased by 5 per cent, both at constant and current currency rates. Although the quarter's OIBDA (Operating Income Before Depreciation & Amortisation) increased by 46 per cent, there was a 3 per cent decrease on a full-year basis in constant currency.

Stockmann plc (HEL: STOCKA)

Stockmann Group, an international omnichannel retail group, operates two divisions: Lindex—a global women's fashion company offering lingerie in the Nordics, and Stockmann—a premium multi-brand retailer with department stores in Finland and the Baltics.

In its financial bulletin dated February 9, 2024, the group reported its Q4, FY23 revenue of €274.3 million (~$299.89 million), increasing by 0.6 per cent and 3.9 per cent in local currencies. The gross margin remained flat at 57.5 per cent against 57.4 per cent in the last quarter of 2022.

The full-year revenue decreased by 3.1 per cent (but increased by 1.6 per cent in local currencies) from €981.7 million (~1,073.29 million) in 2022 to €951.7 million (~$1,040.49 million) in the concluded fiscal. For the same period, the revenues in division Lindex decreased to €633.1 million (~$692.11 million) versus €661.1 million (~$722.72 million), and revenues in division Stockmann also dropped from €320.6 million (~$350.48 million) in 2022 to €318.5 million (~348.19 million), impacted by the reduced size of the Stockmann department store. The net income for the full year reduced to €51.7 million (~$56.52 million) from €101.6 million (~$111.07 million) in 2022, as a result of a lower operating result and higher interest expenses for leases despite a positive impact from lower tax expenses. Consequently, EPS declined to €0.33 (~$0.36) from €0.65 (~$0.71) in 2022.

In 2024, Stockmann expects its revenue to increase by 1-3 per cent in local currencies compared to 2023. The group's adjusted operating result is estimated to be €70-90 million (~$76.51-98.37 million). Foreign exchange rate fluctuations may have a significant effect on the adjusted operating result.

MODERATE: GROWTH IN EITHER SALES OR PROFITS

Under Armour Inc. (NYSE: UA, UAA)

Headquartered in Baltimore, Maryland, Under Armour is a leading inventor, marketer, and distributor of branded athletic performance apparel, footwear, and accessories. The company announced unaudited financial results for its third quarter (October 23 – December 23) of fiscal 2024 on February 8, 2024.

In the quarter that ended December 31, 2023, revenue was down 6 per cent (7 per cent currency-neutral) to $1.5 billion. Wholesale revenue declined 13 per cent to $712 million, and D2C revenue increased 4 per cent to $741 million due to a 5 per cent increment in owned and operated store revenue and a 2 per cent increase in e-commerce revenue, which represented 45 per cent of the total D2C business in Q3, FY24. The apparel category dropped 6 per cent to $1 billion, footwear decreased 7 per cent to $331 million, while the revenue of accessories remained flat at $105 million. The company's gross margin increased 100 basis points to 45.2 per cent, and net income was $114 million. Excluding a $50 million earn-out benefit in connection with the sale of the MyFitnessPal platform, the litigation reserve expense, and related tax impacts, the adjusted net income was $84 million, yielding diluted EPS of $0.26 and adjusted diluted EPS of $0.19.

In the updated full-year (April 23 – March 24) 2024 outlook, revenue is expected to be down 3 – 4 per cent, tightening the previous expected decline of 2 – 4 per cent. The gross margin is expected to be up 120 – 130 basis points against the previous expectation of 100 – 125 basis points; and the operating income is expected to reach $297 million, whereas adjusted operating income is expected to stay between $310 and $320 million.

STRONG: GROWTH IN BOTH SALES AND PROFITS

Loblaw Companies Limited (TSX: L)

The Canadian Loblaw Companies Limited operates corporate and franchise supermarkets under 22 regional and market-segment banners, as well as pharmacies, banking, and apparel. The Toronto Stock Exchange-listed company, headquartered in Brampton, Ontario, announced its unaudited financial results for Q4, FY23 ended December 30, 2023, on February 22, 2024. The company delivered another quarter of strong operational and financial results, maintaining its focus on retail excellence.

The fourth-quarter revenue increased by $524 million (+3.7 per cent) to $14,531 million, led by retail segment sales of $14,157 million, which registered a 3.4 per cent increase over the same period last year. The increase in e-commerce sales was 14.6 per cent. The operating income increased by 8.3 per cent, and net earnings increased by 2.3 per cent.

For full fiscal 2023, total annual revenue stood at $59,529 million, which grew by $3,025 million or 5.4 per cent year-on-year. The sales in e-commerce increased by 10.7 per cent, and net earnings available to common shareholders were $2,088 million – an increase of $179 million or 9.4 per cent. As a consequence, the diluted EPS also increased by $0.77 (+13.4 per cent) to $6.52.

Winmark Corp (NASDAQ: WINA)

Minneapolis-based Winmark is a resale company of fashion and lifestyle merchandise that focuses on sustainability and small business formation. It offers resale franchises of Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round to interested entrepreneurs. It ended FY2023 with 1,319 operational franchises over 2,800 territories, with another 71 in the pipeline waiting to open.

Announcing the full-year result on February 21, 2024, the company reported its net income for the entire year ended December 30, 2024, at $40.178 million ($11.04 per share diluted) compared to a net income of $39.425 million ($10.97 per share diluted) in 2022. The net income resulted from annual revenues of $83.243 million, which increased from $81.410 million in the previous year. The results for the concluded year were impacted by the company’s decision in May 2021 to run off its leasing portfolio. Additionally, the financial performance for Q4 and the full year 2022 included an extra week of operations due to the company’s fiscal ending on the last Saturday of December.

Alongside, the fourth quarter of 2023 was also reported: net income was $9.717 million (revenues of $20.039 million) compared to a net income of $10.176 million (revenues of $21.125 million) in Q4 2022.

Fibre2Fashion News Desk (WE - SB)