Rudy Milian, CRRP’s Post

[Nordstrom Inc. Goes Into the Black for Q3] Despite declining sales volumes across all channels, Nordstrom Inc. went into the black for the third quarter ended Oct. 28, thanks to improved execution. The Seattle-based retailer on Tuesday reported third-quarter net earnings of $67 million, or earnings per diluted share of 41 cents, compared to a net loss of $20 million, or 13 cents, in the year-ago period. Earnings before interest and taxes were $102 million, compared to $3 million in the year-ago period. Net sales decreased 6.8 percent versus the same period in fiscal 2022. Gross merchandise value decreased 7.1 percent. Third-quarter net sales include a 270 basis point negative impact from the wind-down of Canadian operations. The timing of Nordstrom’s Anniversary Sale, with one week shifting from the second quarter to the third quarter, had a positive impact of approximately 200 basis points on net sales compared with 2022. Excluding the impacts of the Canadian wind-down, which occurred this year, and Anniversary Sale timing shift, net sales would have been down approximately 6 percent. “In the third quarter we continued to make progress against our priorities, and we’re especially pleased with the resulting improvements in gross margin and earnings,” Erik Nordstrom, chief executive officer of Nordstrom, said in a statement. “Given continued uncertainty and softening consumer spend, we’re remaining agile and focused on serving our customers.” In a conference call with investors, Nordstrom spelled out three main priorities: improving Rack, increasing inventory productivity and further optimizing the supply chain. “We defintiely see Rack as a growth vehicle,” Nordstrom said. The goal is to deliver a more robust assortment of “great brands at great prices.” To that end, the company has assigned “more and more dedicated roles at Rack and has an improved buying team,” Nordstrom said. “We see a lot of opportunity to add profitable new Rack stores. We are getting really great returns on those investments.” At the Nordstrom department stores, “We see opportunities with different inventory models to allow us to have a greater selection whether we own the merchandise or not,” the CEO said. “Step two is using data capabilities to curate the offer.”  “Thanks to solid execution by our merchants, we’re heading into holiday in a favorable inventory position across both banners,” Pete Nordstrom, president and chief brand officer of Nordstrom, said in a statement. “We have a strong and relevant assortment of brands and products we know our customers respond to, and we’re excited to help them celebrate the moments that matter this holiday season.” … source: sourcing journal https://lnkd.in/gqHzxF6Q

Shares in retailers don’t grow as much as technology stocks unless you buy them when the companies are fairly young or the retail chain after many years still has a lot of physical store expansion ahead. Two long-term familiar discount chains still show stock growth potential because they are still looking to grow their store count over the near term: Ross Stores, Inc. (ROST) and The TJX Companies, Inc. (TJX). Ross Stores, Inc. operates 2,127 ROSS DRESS FOR LESS and dd’s Discounts locations across 43 states, the District of Columbia, and Guam hoping to grow Dress for Less to 2,900 locations and dd’s to 700 stores. Store openings planned in 2024 include 75 Ross Dress for Less and 15 dd’s Discounts locations. This includes new Ross stores in the newer markets of Michigan and New York. The current strategy for growing dd’s is in existing markets of California, Florida and Texas, according to Gregg McGillis, Ross Stores’ group executive vice president, property development. TJX Cos, which runs more than 4,900 stores in nine countries under several store brand names including T.J. Maxx, MARSHALLS LLC, and Homegoods, plans to expand its global fleet by 1,300 more locations, according to TJX CEO Ernie Herrman. TJX and Ross have been around for decades, and their stocks have crushed the S&P 500, both recently and in the long haul due to these retail chains growing revenue consistently as well as their store counts.

���Macy's on Tuesday forecast annual sales and profit below expectations and said it would shutter about 150 stores through 2026 as part of a new plan that would help save $100 million in costs this year.” “Its shares rose 7% as the department store chain also beat quarterly profit estimates. They have lagged peers in 2023, declining about 3% compared to a 13% jump in rivals Nordstrom and Kohl's.” “The locations made up for less than 10% of Macy's annual sales and were mostly underperforming mall-based stores, CFO Adrian Mitchell told Reuters.” “"Fiscal 2024 will be a transition and investment year", CEO Tony Spring said on a conference call, adding he expects Macy's to return to consistent sales and profit growth from 2025.” “It also said it would open 15 Bloomingdale's locations and at least 30 new Bluemercury stores over the next three years to accelerate growth for its better-performing luxury brands.” “Its holiday-quarter comparable sales declined 4.2% on an owned-plus-licensed basis, better than analysts' estimates of 5.8% drop, as steep discounts drew shoppers.” “However, net credit card revenue fell 26% to $195 million, in a sign that economic pressure, particularly among its low- and middle-income customers, led to higher bad debts.” - Kate Masters, Savyata Mishra

#TJXCompanies Inc (NYSE:TJX), the parent company of #TJMaxx, is likely to report a solid increase in second-quarter revenue and earnings when it reports back to the market on Wednesday, August 16.  The retailer is expected to deliver revenues of $12.4 billion, up 4.7% from a year earlier, with earnings of $0.76 per share based on the consensus estimate of 10 analysts, according to Zacks Investment Research. That would be a 10% improvement on 2Q 2022.  According to Zacks, TJX has benefitted from customers visiting its stores as well as those buying online, undertaking several initiatives to strengthen its e-commerce business. “We believe that the company’s off-price model, along with its strategic store locations, impressive brands and fashion products are likely to have aided its performance in the quarter under review,” commented Zacks. More at #Proactive #ProactiveInvestors #NYSE #TJX http://ow.ly/Tz3P104ReRc

“Macy’s plans to shutter 150 underperforming stores in the next five years is set to be a boon to off-price retailers, according to research from Jeffries analysts and Earnest Analytics. Both firms see the retailers run by off-price conglomerate TJX, particularly its T.J. Maxx banner, as benefiting the most. Competitors as well as other Macy’s stores could grab billions in sales from the closures, according to Jeffries analysts led by Corey Tarlowe.” “Some of this has to do with proximity: 63% of Macy’s stores, or nearly 500 locations, operate within a mile of a T.J. Maxx or Marshalls, both run by TJX, according to a real estate analysis from Jeffries. Nearly all of those 498 Macy’s locations had at least one T.J. Maxx or Marshalls within five miles. Put another way, more than 1,000 T.J. Maxx or Marshalls stores sit within five miles of a Macy’s store. Just 12 Macy’s stores do not compete wither either of those retailers within a five-mile radius, according to that research.” “Moreover, the Jeffries team found commonalities between TJX and Macy’s customer bases. Nearly half of each company’s customers have an annual household income above $100,000, compared to about 30% for Burlington and about 34% for Ross.” “According to Earnest credit card data, about a third of Macy’s customers already also shop at T.J. Maxx, Kohl’s and Marshalls. Again, T.J. Maxx is the leader in this metric, with 37% of Macy’s customers also shopping there over the prior 12 months, followed by Kohl’s at 33% and Marshalls at 32%. Just over 25% of Ross Stores customers overlap with Macy’s and 22% of Nordstrom full-line customers do, per that report.” “Earnest data shows Macy’s customers dedicate the largest portion of their department store spending at TJX retailers, with 27% share in Q1 this year, up from 25% a year ago. Nordstrom got the next largest share at 21%, while Macy’s itself garnered 15%.” “Macy’s closure plans could fuel what has already been a steady loss of market share to off-price retail. TJX in particular grew its share in apparel and footwear from 12% in 2018 to 16.1% in 2023, with gains each year. Among department stores, Macy’s did build share from 2018 through 2023, but peaked in 2021 at 25.9% and then declined to 25.1% by 2023, according to Jeffries analysts.” - Daphne Howland

Kohl's on Wednesday said Q2 net sales fell 4.8% year over year to $3.7 billion, with comps down 5%. Other revenue, mostly the retailer’s store credit card, fell 3.1% to $217 million. Inventory was down 14% year over year. Gross margin declined by 61 basis points year over year to 39%, driven by increases in product cost and shrink but partially offset by lower expenses in freight and e-commerce-related shipping. Net income plunged nearly 60% to $58 million, according to a company press release. Margins and sales continue to be a challenge for many enterprises. A business review of data including health check of reports along with the budget, forecasting, costing, capital, cash flow, demand, capacity, and HR planning may find ways to increase profits by product, facilities, and geographies.   Here are links that can assist with your data and AI journey as part of your planning, forecasting, budgeting, capital planning, cash flow forecasting, analysis, activity-base costing, demand planning, capacity planning, HR planning, and reporting cycles (operational, management, and regulatory):   Stock market - Blog – Stock Market for the week-end August, 18, 2023 - https://lnkd.in/g5Ky_Rc5   Key Environmental Areas – https://lnkd.in/gmKExD7a    Scenario Planning -  https://lnkd.in/g2M6Rka4   GAP Analysis https://lnkd.in/e9waApw   ESG reporting Standards? - https://lnkd.in/gnms3fy7     Close, consolidate, and reporting - https://lnkd.in/gARHRXB4       Data Management - https://lnkd.in/g8SvPfDx     Circularity - https://lnkd.in/gJwAujhp     Biodiversity - https://lnkd.in/gJxv-fZj   #profitability #sales #margins #inventory #cashflow #EBITDA #EBIT #production #integration #integratedplanningandreporting #SDG #Metrics #Scope1 #Scope2 #scope3 #operational #management #regulatory #profitability #sales #margins #inventory #cashflow #EBITDA #EBIT #production #integration #integratedplanningandreporting

[Kohl’s Corp. Sees Steep Q2 Declines] Kohl’s Corp., faced with softening consumer demand, saw steep declines in both the top and bottom-lines during the second quarter which fell in line with the retailer’s expectations. Net income for the period ended July 29 was $58 million, or $0.52 per diluted share. This compares to net income of $143 million, or $1.11 per diluted share in the prior year. Operating income was $163 million compared to $266 million in the prior year. As a percentage of total revenue, operating income was 4.2 percent, a decrease of 233 basis points year-over-year. Net sales decreased 4.8 percent to $3.7 billion, from $3.86 billion in the year-ago period. Comparable sales were down 5 percent. Tom Kingsbury, Kohl’s chief executive officer, said, “Our second quarter earnings were in line with our expectations. We maintained strong sales momentum in Sephora at Kohl’s, reduced inventory by 14 percent, and managed expenses tightly. Further, solid cash flow generation allowed us to reduce our borrowings in the period.” “Many of our strategic efforts are just underway, which we expect will contribute incrementally in the back half of the year, and even more so in 2024 and beyond,” Kingsbury added. “We have enhanced the store experience and recently opened an additional 200 Sephora at Kohl’s shops, and are taking steps to further optimize our assortment and simplify our value strategies. Looking ahead, we are reaffirming our 2023 guidance and remain confident in our longer-term opportunity. I want to thank the entire Kohl’s team for their efforts to support and drive improved Kohl’s performance.” Key competitors to Kohl’s, including Macy’s and Target, also reported second quarter top-line declines, citing softening consumer demand, though Walmart, abetted by its strong grocery offerings, posted gains. Historically at Kohl’s, back-to-school revenues have represented a bigger percent of the overall annual volume, compared to competitors. That’s by virtue of Kohl’s being consistently among the most promotional of retailers offering strong values, and maintaining a one-stop-shop family appeal. At the start of the back-to-school season, Kohl’s executives told WWD the store would be offering more ways for customers to save money, and that it simplified its value messaging so shoppers can readily understand the deals being offered. The marketing has also been emphasizing versatility, meaning how key back-to-school fashion items can be outfitted in different ways and worn for different occasions. Strong values have been offered in T-shirts, denim, sneakers, backpacks, utility cargo bottoms, ... Diluted earnings per share are projected in the range of $2.10 to $2.70, excluding any non-recurring charges. Capital expenditures are seen at between $600 million to $650 million, including expansion of the Sephora partnership and store refresh activity. Nguồn: sourcing journal https://lnkd.in/gdqjCzMS

Retail Earnings Paint Complex US Consumer Picture: Kohl's Shines, Dick's Struggles Recently issued earnings reports from prominent retailers paint a nuanced picture of the U.S. consumer landscape. While Kohl’s Corp (NYSE:KSS) managed to beat expectations despite a broader slowdown, other retailers, notably Dick’s Sporting Goods Inc (NYSE:DKS) and Macy’s Inc (NYSE:M), are showing signs of consumer fatigue. 3 Retail Companies Kohl’s: The Menomonee Falls, Wisconsin-based retailer issued earnings of 52 cents per share ahead of the 22 cent estimates. Revenues hovered above $3.89 billion, which beat the $3.69 billion Street estimate, according to Benzinga Pro. Despite facing a broader retail slowdown, Kohl’s issued beat estimates, thanks to reduced inventories, minimized discounts, and cost-cutting measures. New CEO Tom Kingsbury credited the company’s lean inventory strategy and selective discounts for the upswing. Though, it wasn’t all ...Full story available on Benzinga.com

Here are some interesting stories from the world of retail for Wednesday, November 21: 👖 Abercrombie & Fitch Co. blew past estimates as it posted a 20% jump in sales thanks to a strong back-to-school shopping season and growth at both its namesake brand and Hollister. 🏬 Kohl's CEO is shifting the focus back to stores: ‘The digital business is really what’s bringing us down’. The department store notched more declines in Q3; but store comps were stronger, thanks in part to its Sephora partnership. 🖥 Last quarter Best Buy thought the electronics market was picking up. However, trends softened the retailer ended up with comparable sales dropping 6.9% in August, September and October. 🔨 Lowe's Companies, Inc. lowered its full-year sales and earnings guidance, after weaker-than-expected spending on do-it-yourself projects. It missed Wall Street’s quarterly sales expectations for the fiscal third quarter. 👗 Urban Outfitters on Tuesday reported third-quarter results that beat expectations, helped by wealthier shoppers at its Anthropologie and Free People stores. 🛏 After operating primarily as an online direct-to-consumer brand, Boll & Branch is now ready to grow its physical presence. The company just opened its new Dallas flagship 3,300 square-feet - part of a wider expansion plan. ⬛ This year, retailers clearly threw out that playbook and rolled out Black Friday-like deals weeks in advance of the big day. The month-long sale season may now dilute the impact of Black Friday itself, notes CNN. 🏪 While retail giants like Amazon and Walmart hope for big profits on Black Friday, the less-heralded Small Business Saturday is looking to continue its winning streak for nearly 32 million small businesses. 💵 Increased revenue in the early part of the holiday season has been fueled heavily by discounts. Adobe found the apparel industry began to offer steep discounts at the beginning of October. 🧧MINISO USA plans to open at least 15 more US stores by the end of the year and will enter two new states: North Carolina and New Hampshire. The China-based discount retailer opened more than 20 US stores in recent months. 🦃 Heritage turkeys are in demand as Thanksgiving approaches. Colorful, playful and spritely bird breeds are on the rebound as a small group of niche farmers are raising and selling the birds. 🎄 US retailers across apparel, electronics and home improvement are bracing for a challenging holiday season, a sign that higher discounts might not spark the level of spending the companies are hoping for, says Reuters. #retail #retailnews #economy 

Burlington Stores, Inc. (NYSE:BURL) reported revenue and earnings slightly ahead of market expectations, though the ‘off-price’ clothes retailer’s quarter evidently didn’t wow investors. Earnings per share was marked at 60 cents, beating forecasts for 44 cents, whilst net income was up significantly at $30.9 million compared to $12 million a year ago. Revenue for its second quarter came in at $2.17 billion, up from $1.98 billion for the same period last year, and, a smidgen more than the $2.166 billion projected amongst analysts. Comparable store sales were up 4%, at the top end of guidance, though chief executive Michael O’Sullivan cautioned over the pressure on the discount retailer’s core consumer base as Burlington looked to the rest of 2023. More at #Proactive #ProactiveInvestors #NYSE #BURL #BurlingtonStores http://ow.ly/PlmI104S3Z5