Leading American fashion retailers report rise in revenue in Q1

The financial reports from major US fashion retailers Ross Stores, Burlington Stores, TJX Companies, and Nordstrom reveal a mixed performance in the first quarter (Q1). Despite varying challenges, particularly in gross profit margins and net income, all leading retailers reported an increase in revenue for the quarter.

Burlington Stores

Burlington Stores, a leading US-based off-price retailer, reported total sales of $2,357 million in Q1 FY24, reflecting an 11 per cent increase compared to Q1 FY23. Comparable store sales rose by 2 per cent over the same period. The company's gross margin rate improved significantly to 43.5 per cent of net sales, up from 42.3 per cent in Q1 FY23, an increase of 120 basis points. Net income for the quarter surged to $79 million, or $1.22 per share, compared to $33 million, or $0.50 per share, in Q1 FY23. Adjusted net income was even higher, at $91 million, or $1.42 per share, compared to $55 million, or $0.84 per share, in the previous year’s first quarter.

Burlington's adjusted EBITDA increased to $217 million, up from $157 million in Q1 FY23, representing an increase of 180 basis points as a percentage of sales. Adjusted EBIT also saw a significant increase, reaching $135 million compared to $87 million in Q1 FY23, an increase of 170 basis points as a percentage of sales. These results indicate strong operational efficiency and effective cost management.

TJX Companies

The TJX Companies, a leading off-price apparel and home fashions retailer, reported net sales of $12.5 billion in the first quarter, representing a 6 per cent increase compared to the first quarter of the previous fiscal. Consolidated comparable store sales rose by 3 per cent. The company achieved a net income of $1.1 billion for the first quarter, with diluted earnings per share (EPS) of $0.93, marking a significant 22 per cent increase from $0.76 in the last year. This robust performance was underpinned by a pre-tax profit margin of 11.1 per cent, which was 0.8 percentage points higher than the 10.3 per cent recorded in the same period last year. The company's gross profit margin was 30 per cent, up by 1.1 percentage points from the same quarter in the previous fiscal.

Nordstrom

Nordstrom, Inc, a leading fashion retailer in the US, reported a 5.1 per cent increase in net sales to $3.22 billion in Q1 FY24, while comparable sales increased by 3.8 per cent. Gross merchandise value (GMV) saw a 4.9 per cent increase. The Nordstrom banner experienced a modest net sales increase of 0.6 per cent and a 1.8 per cent rise in comparable sales, with GMV up by 0.3 per cent. In contrast, Nordstrom Rack showed impressive growth, with net sales surging by 13.8 per cent and comparable sales climbing by 7.9 per cent compared to the same period last year.

Digital sales slightly decreased by 0.2 per cent year-over-year, representing 34 per cent of total sales during the quarter. Despite the growth in overall sales, the company reported a decline in gross profit as a percentage of net sales, which fell to 31.6 per cent, a decrease of 225 basis points compared to Q1 FY23. Additionally, Nordstrom reported a net loss of $39 million, or a loss per share of $0.24. The decline in gross profit margin and net income highlights the challenges Nordstrom faces in managing costs and maintaining profitability amid a competitive retail environment.

Ross Stores

American retailer Ross Stores reported an 8 per cent increase in sales to $4.9 billion for the 13 weeks ended May 4, 2024, up from $4.5 billion in the prior year period, with comparable sales rising by 3 per cent. The company’s EPS of $1.46 on net earnings of $488 million. This compares to EPS of $1.09 on net income of $371 million for the same period in 2023.

Fibre2Fashion News Desk (DP)