- Prachi Singh |
Foot Locker’s net income for the company’s second quarter ended July 29, 2017 was 51 million dollars or 0.39 dollar per share, compared with 127 million dollars or 0.94 dollar per share in the same period of 2016. The company said, this result included a 50 million dollars pre-tax litigation charge related to the conversion of its pension plan in 1996. Excluding this charge, non-GAAP earnings were 0.62 dollar per share.
“Sales of some recent top styles fell well short of our expectations and impacted this quarter’s results. We believe these industry dynamics will persist through 2017, and we expect comparable sales to be down three to four percent over the remainder of the year,” said the company’s Richard Johnson, Chairman and CEO in a statement.
Q2 same-store sales decline 6 percent
The company’s comparable-store sales decreased 6.0 percent, while total sales decreased 4.4 percent, to 1,701 million dollars. Excluding the effect of foreign currency fluctuations, total sales for the second quarter decreased 4.3 percent. The company’s gross margin rate decreased to 29.6 percent of sales from 33 percent a year ago.
“We are obviously disappointed in the results for the quarter. In addition to working with our vendor partners to identify and capture new trends faster, we are also evaluating a realignment of our capital expenditure priorities and additional expense reductions so we can regain our momentum on both the top and bottom lines and deliver long-term value for our shareholders,” added Johnson.
During the second quarter, the company opened 24 new stores, remodeled or relocated 38 stores, and closed 19 stores. As of July 29, 2017, the Foot Locker operated 3,359 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 68 franchised Foot Locker stores were operating in the Middle East, as well as 14 franchised Runners Point stores in Germany.
First half net incomes drops to 231 mn dollars
Net income for the company’s first six months of the year decreased to 231 million dollars or 1.74 dollars per share on a GAAP basis, compared to 318 million dollars or 2.33 dollars per share, for the corresponding period in 2016. On a non-GAAP basis, earnings per share for the period were 1.97 dollars, a 15 percent decrease compared to the same period in 2016.
Year-to-date sales were 3,702 million dollars, a decrease of 1.7 percent compared to sales of 3,767 million dollars in the corresponding six-month period of 2016. Year-to-date, comparable store sales decreased 2.6 percent, while total year-to-date sales, excluding the effect of foreign currency fluctuations, decreased by 1.1 percent.
- AFP |
China's first "cyber court" was launched on Friday to settle online disputes, as the legal system attempts to keep up with the explosion of mobile payment and e-commerce. Residents of the eastern city of Hangzhou -- home to e-commerce giant Alibaba -- can now register their internet-related civil complaints online and wait to log onto to their trial via videochat.
The cyber court will "offer regular people an efficient, low-cost solution to these new kinds of disputes that take place on the internet," Du Qian, the cyber-court chief justice, told the official Supreme People's Court news agency. "Not only will this make lawsuits as convenient as online shopping, but it will also give online shopping the same degree of judicial protection as consumption at brick-and-mortar stores."
The court will handle cases such as online trade disputes, copyright lawsuits and product liability claims for online purchases. China is home to the world's largest number of internet users -- 731 million at the end of last year -- and e-commerce is a vital part of the government's efforts to turn China into a consumer demand-driven economy.
Consumers spent 17.8 billion dollars during Alibaba's biggest online shopping promotion on November 11 last year, more than twice the five-day desktop sales from Thanksgiving through Cyber Monday in the US last year.(AFP)
- Vivian Hendriksz |
London - The wearable device market is expected to hit over 150 billion US dollars in sales annually by 2027, according to new research from IDTechEx. New advancements in wearable technology are being fuelled by increasing global interest, leading to numerous companies investing in new product development, including the likes of Nike and Apple.
Fitness trackers, smartwatches and smart eyewear (including VR and AR) remain the leading products within the wearables market, although some of these products may face difficulties growing in the future. Take fitness trackers for example, which are able to measure body functions during moments of physical activity and share the gathered data with the user via their smartphone. Once the most popular wearable, the market for fitness tracker is reaching its saturation point. In addition, as smartwatches, such as the Apple Watch and the Motorola Moto 360, continue to catch up the capabilities offered by fitness trackers, fitness tracker companies are struggling to keep pace. Market fitness tracker leader Fitbit experience close to a 40 percent decrease in revenue over recent quarters, and Jawbone is currently undergoing liquidation.
However, Fitbit has managed to retain momentum after acquiring smartwatch company Pebble and expects its new smartwatch to deliver key results. “Our smartwatch, which we believe will deliver the best health and fitness experience in the category, is on track for delivery ahead of the holiday season and will drive a strong second half of the year,” said James Park, CEO of Fitbit in a statement in the company Q2 results. “In the long term, we are confident in our vision for the future and are uniquely positioned to succeed by leveraging our brand, community, and data to drive positive health outcomes.” Smartwatches and fitness trackers remain the largest segment for wearables, accounting for more than 80 percent of shipments in 2016, according to a report from Tractica.
However, their shared market segment is predicted to decrease down to 50 percent by 2022. Body sensors, which can also be used in smart clothing, are predicted to become the third largest wearable device segment by 2022. This development is likely to be driven by wearable patches used in healthcare applications, as body sensor shipments are estimated to reach 92.1 million by 2022. Health-focused applications are currently pushing the next phase of growth in wearables, which are moving outside of fitness and activity trackers to devices which can help prevent and manage chronic health conditions.
Photo: Fitibi, via website
- Vivian Hendriksz |
IN-DEPTH London - Succeeding within the retail industry remains a tremendous feat - especially within the fickle fashion market. As consumers around the globe continue to shift how, when and what they buy, keeping pace is vital part to any success story. But within the fashion industry, which continues to be plagued by record breaking store closures, bankruptcies and extreme discounting, there stands one British online pure-player which continues to buck this trend - Asos. Not many fashion retailers can boast of a 32 percent increase in sales, but that is precisely what the London-based retailer reported.
For the four months to June this year, Asos reported a total of 660.1 million pounds in sales and expects full year profits to hit 79.4 million pounds. With a market capitalization of close to 6.5 billion dollars (5.05 billion pounds), Asos is the most valuable online fashion retailer in the UK. But what is the secret to Asos's success story? FashionUnited takes a closer look at the secrets behind Asos's success and shares 5 main reasons behind Asos recent achievements.
1. Embracing the New
One of the main areas driving Asos business is its focus on the new. As the online retailer remains committed to offering its consumers the latest trends, Asos continually offers new products. Close to half (41 percent) of the online fashion retailer's current product assortment arrived in store over the last three months, with Asos offering between 2,500 and 7,000 new items every week, according to data from Edited, retail analytics firm. Asos also times the drop of its trends as well, rather than launching singular styles it waits until it has a full assortment before dropping them in one go, solidifying its position as a fast-fashion trend authority.
For example, in response to the ongoing athleisure trend, Asos has increased its sportswear offering by 268 percent during the first half of 2017 compared to the same period one year ago. In the same period, full price sell outs have increased by 100 percent. The top five most stocked brands Asos currently offers are Under Armour, Nike, Puma, Nike Running, Nike Training followed by Adidas and Reebok.
2. It’s not about being the cheapest
Another area helping push Asos forward is price. Rather than focusing on being the cheapest, like many fast-fashion retailers, Asos offers a wide range of branded goods at different price-points. These third-party goods, which come from a number of brands, tend to be higher priced than its own in-house goods. This is strategy is much more in line with traditional catalogue retailers and helps Asos differentiate itself from other online fashion retailers, like Boohoo. In addition, Asos also focuses on offering stand-out, exclusive products which can’t be found anywhere else.
Prices on these ‘exclusive’ products tend to skew higher than the rest of the assortment and also help establish Asos trend-leading reputation, according to Edited. Asos uses these exclusive products to drive specific trends it is offering as well. For example, the online fashion retailer recently featured exclusive athleisure products with Puma. Nike and Eliesse.
3. Strategical Discounting
Even though many retailers still struggle when it comes to discounting, Asos has developed a strong system for strategical discounting. Rather than lumping its discounted products together with its full-priced, Asos has a dedicated ‘outlet’ section on its website. This means that sale shoppers know exactly where to go if they are looking for a bargain and regular shoppers can focus on browsing through the new collections - although Asos even introduces new branded products directly into its outlet section as well.
Outside of its outlet, Asos does offer promotional discounting which is mostly driven by email discount codes. Key dates are in June and December, although over the last three months 20 out of 40 women’s newsletters mentioned sales, according to Edited. Trends are not immune to discounting as well. At the moment 37.2 percent of Asos’s UK sportswear offering is discounted by an average of 37 percent.
4. Solid Core
Although Asos is a trend driven e-tailer, the backbone of its fashion sales remains core items, which account for 8 percent of all its products, according to data from Edited. This includes wardrobe staples such as own-brand blue and black denim for men and women, Tommy Hilfiger shirts for men, Nike, Converse and Birkenstocks footwear, as well as simple own-brand shirts and blouses. In addition, Asos own Curve and Maternity lines also offer a range of core pieces, which continue to sell well.
5. All about the brand mix
Asos’s leading trump card remains its breadth of its brand mix. Asos’s own-brand assortment, which accounts for one-third of all its products, spreads across a range of categories including petite, tall, plus size and maternity lines. At the same time, Asos also focused on niches, such as wedding, reworked vintage and premium sectors, which help the fashion retailer expand its consumer reach and appeal to a diverse demographic. Asos’s own branded strategy sees the fashion retailer focus on unique product over price-point, which gives Asos own-house label room to remain price competitive. Outside of Asos’s own-brand offering, its best selling brands remain New Look, River Island, Nike, Boohoo, French Connection and Ted Baker, according to Edited.
“Asos’s ability to grow in an increasingly crowded marketplace is an impressive feat, based on a careful combination of factors leading to bottom line growth,” says Katie Smith, Senior senior fashion and retail analyst at Edited. “By moving quickly to offer a strong depth and breadth of assortments, Asos is viewed as both an attractive and highly convenient retailer to the consumer.”
Photos: Asos AW17 Lookbook
- Prachi Singh |
For the period between April 1 and June 30, 2017, Björn Borg Group’s net sales increased by 10.4 percent to 134.8 million Swedish krona (16.5 million dollars) and by 7.2 percent excluding currency effects. The company said gross profit margin was 52.1 percent compared to 53.5 percent, while earnings per share before and after dilution amounted to–0.11 Swedish krona (0.01 dollar) against–0.09 Swedish krona (0.01 dollar) for the same period last year.
“In summing up the second quarter there are several victories to celebrate with a big payoff from our focus on social media, where we are increasing awareness of our sportswear brand in Sweden and the Netherlands. I can lastly add that our efforts in 2016 to improve deliveries and raise efficiencies have proven very successful. We are increasing delivery reliability at the same time that we reduced costs in the second quarter of 2017,” said the company’s CEO Henrik Bunge in a media release.
Björn Borg reports operating loss of 0.3 mn Swedish krona
The company’s operating loss in the quarter amounted to 0.3 million Swedish krona (0.04 million dollars), against a year-earlier profit of 0.3 million Swedish krona. The loss after tax was 3.3 million Swedish krona (0.41 million dollars), against a year-earlier loss of SEK 2.2 million Swedish krona (0.27 million dollars).
For the reporting period between January 1 to June 30, 2017, the Björn Borg Group’s net sales increased by 14.4 percent to 320.5 million Swedish krona (39.4 million dollars). Excluding currency effects the company’s sales increased by 12.4 percent. The company said, the gross profit margin was 50.3 percent against 51.5 for the same period last year.
Operating profit amounted to 6.5 million Swedish krona (0.80 million dollars) compared to 14.2 million Swedish krona (1.7 million dollars). Profit after tax amounted to 1.7 million Swedish krona (0.2 million dollars against 4.3 million Swedish krona (0.5 million dollars), in the first six months of 2016. Earnings per share before and after dilution amounted to 0.07 Swedish krona (0.01 dollar) compared to 0.20 Swedish krona (0.02 dollar) in the same period last year.
- Prachi Singh |
On a reported basis, Gap said second quarter fiscal year 2017 diluted earnings per share were 0.68 dollar and 0.58 dollar on an adjusted basis, excluding a 0.10 dollar benefit from insurance proceeds related to the Fishkill fire. Gap’s comparable sales were up 1 percent versus a 2 percent decrease last year, while net sales for the quarter were 3.80 billion dollars compared with 3.85 billion dollars for the second quarter of fiscal year 2016.
“With a third consecutive quarter of comp sales growth, we are seeing our investments in product, customer experience, and brand equity begin to pay off. Based on the strength of the first half, we are pleased to increase our full year earnings guidance,” said Art Peck, President and CEO, Gap Inc. in a press release.
Comparable sales results of the brand portfolio
The company reported positive 5 percent comparable sales at Old Navy Global versus flat last year, negative 1 percent at Gap Global versus negative 3 percent last year and negative 5 percent at Banana Republic Global versus negative 9 percent last year.
Gap added that the translation of foreign currencies into US dollars negatively impacted the company’s net sales by about 37 million dollars.
Gap updates FY17 earnings outlook
The company updated its reported diluted earnings per share guidance for fiscal year 2017 to be in the range of 2.12 dollars to 2.20 dollars. Excluding the benefit from insurance proceeds related to the Fishkill fire of about 0.10 dollar, the company expects its adjusted diluted earnings per share to be in the range of 2.02 dollars to 2.10 dollars.
The company continues to expect comparable sales for fiscal year 2017 to be flat to up slightly and net sales to be slightly below this range driven by an expected negative impact from foreign currency fluctuations year-over-year as well as the impact from international closures in fiscal year 2016.
The company paid a dividend of 0.23 dollar per share during the second quarter of fiscal year 2017. In addition, on August 10, 2017, the company announced that its board of directors authorized a third quarter dividend of 0.23 dollar per share.
Gap ended the quarter with 3,642 store locations in 47 countries, of which 3,179 were company-operated. The company continues to expect store count to be about flat at the end of fiscal year 2017 compared with fiscal year 2016.
- AFP |
Chinese e-commerce giant Alibaba said Thursday its net profit almost doubled in the latest quarter on the back of solid revenue growth in its core shopping business and in cloud computing.
Alibaba, which has made billionaire founder Jack Ma one of China's richest men and a global e-commerce icon, has seen its New York-listed shares soar 80 percent since last December on perennially robust earnings. With those shares at all-time highs, the company's market worth has been fast approaching that of industry leader Amazon.
Alibaba said net income in the quarter which ended June 30 was 14.7 billion yuan (2.2 billion), a year-on-year increase of 94 percent. US dollars ), a year-on-year increase of 94 percent. Alibaba thoroughly dominates e-commerce in China mainly through its Taobao platform, and its continued strong earnings performances have underlined the strength of the sector even as the country's broader economic growth has slowed.
Alibaba revenues soar 56 percent in Q2
Overall revenues in the quarter rose 56 percent to 50.2 billion yuan, beating the 7.2 billion average of analyst estimates compiled by Bloomberg. U S do llar average of analyst estimates compiled by Bloomberg. The performance also beat the 45-49 percent increase for the quarter that the company itself forecast back in June. p>
Revenue from its core commerce offerings grew 58 percent in the quarter to 43.0 billion yuan, while cloud computing revenue jumped 96 percent to 2.4 billion yuan, it said in an earnings statement. Alibaba's Taobao platform is estimated to hold more than 90 percent of the consumer-to-consumer market, while its Tmall is believed to handle over half of business-to-consumer transactions.
"Our technology is driving significant growth across our business and strengthening our position beyond core commerce," the statement quoted Alibaba Group CEO Daniel Zhang as saying. The company said mobile monthly active users on its China retail marketplaces grew to 529 million in June, an increase of 22 million over March of this year.
With its e-commerce operations unassailable at home, Alibaba has sought to extend its shopping dominance by investing in a string of Chinese bricks-and-mortar retailers. But the company, based in the eastern Chinese city of Hangzhou, also has poured money into cloud computing, digital media and entertainment as its seeks to build up new revenue streams.
Revenue from digital media and entertainment operations increased 30 percent 4.0 billion. Alibaba said it also was laying the foundation for long-term growth in its international operations, largely through the Southeast Asian e-commerce platform Lazada. Alibaba raised its stake in Lazada to 83 percent in the quarter. International revenues reached 2.6 billion yuan in the latest quarter, up 136 percent year-on-year. (AFP)
Photo: Courtesy of Alibaba Group
- Prachi Singh |
L Brands earnings per share for the second quarter ended July 29, 2017, were 0.48 dollar compared to 0.87 dollar for the quarter ended July 30, 2016. Second quarter operating income was 300.9 million dollars against 408.2 million dollars last year, and net income was 138.9 million dollars compared to 252.4 million dollars last year.
The company said, reported results above include a pre-tax gain of 108.3 million dollars or 0.24 dollar per share in 2016, related to a cash distribution from Easton Town Center; and a pre-tax charge of 35.8 million dollars or 0.08 dollar per share related to the early extinguishment of the company’s July 2017 notes. Excluding the significant items above, adjusted second quarter earnings per share decreased 31 percent to 0.48 dollar compared to 0.70 dollar last year, and adjusted net income was 138.9 million dollars compared to 204.7 million dollars last year.
Q2 comparable sales decline 8 percent
The company reported net sales of 2.755 billion dollars for the second quarter compared to sales of 2.890 billion dollars for the second quarter ended July 30, 2016. The company reported a comparable sales decrease of 8 percent and said that the exit of the swim and apparel categories had a negative impact of about 6 percentage points and 9 percentage points to total company and Victoria’s Secret comparable sales, respectively.
Since the second quarter comparable sales decline of 8 percent was below the company’s expectations, L Brands said, accordingly, the company’s guidance for the remainder of the year reflects a more conservative sales forecast than its previous guidance. The company updated its guidance for 2017 full-year earnings per share to 3 to 3.20 dollars from 3.10 to 3.40 dollars previously, and issued guidance for third quarter earnings per share between 0.25 dollar and 0.30 dollar.
Picture:L Brands website
- Prachi Singh |
Urban Outfitters announced net income of 50 million dollars and 62 million dollars for the three and six months ended July 31, 2017, respectively. Earnings per diluted share were 0.44 dollar and 0.54 dollar for the three and six months, respectively compared to 0.66 dollar and 0.91 dollars in the same periods last year. Total company net sales for the second quarter were 873 million dollars, a 2 percent decrease as compared to the same quarter last year.
"While we are disappointed in our second quarter performance, we have a number of initiatives underway including: speed to customer, international growth, wholesale expansion and digital investments,” said Richard A. Hayne, the company’s Chief Executive, in a press statement, adding, “We believe these initiatives combined with encouraging fashion apparel trends could lead to improved topline performance in future quarters.
Q2 comparable sales down 4.9 percent
Comparable Retail segment net sales, which include the comparable direct-to-consumer channel, decreased 4.9 percent. By brand, comparable retail segment net sales increased 2.9 percent at Free People, but decreased 4 percent at the Anthropologie Group and 7.9 percent at Urban Outfitters. The decline, the company said, was due to negative retail store sales, which was partially offset by continued sales growth in our direct-to-consumer channel. Wholesale segment net sales increased 10 percent.
For the three and six months, the gross profit rate decreased 440 basis points and 369 basis points versus the prior year’s comparable periods, respectively. The company added that this decline in gross profit rate for both periods was driven by higher markdowns due to underperforming women’s apparel and accessories product at Anthropologie and Urban Outfitters, deleverage in delivery and logistics expenses primarily due to the penetration of the direct-to-consumer channel and deleverage in initial merchandise mark-ups at the Anthropologie and Urban Outfitters brands due to a change in product mix.
During the six months, the company opened a total of 12 new locations including: six Free People stores, four Urban Outfitters stores, one Anthropologie Group store and one Food and Beverage restaurant; and closed six locations including: three Free People stores, one Urban Outfitters store, one Anthropologie Group store and one Food and Beverage restaurant.
Picture:Free People website
- Prachi Singh |
The TJX Companies net sales for the second quarter of fiscal 2018 increased 6 percent to 8.4 billion dollars and consolidated comparable store sales increased 3 percent over last year's 4 percent increase. Net income for the quarter was 553 million dollars and diluted earnings per share were 0.85 dollar, versus the prior year's 0.84 dollar.
Commenting on the company’s results, Ernie Herrman, CEO and President of The TJX Companies, Inc., stated in a press release, "I am very pleased with our strong second quarter results. Earnings per share were 0.85 dollar, also above our plan, and, it's important to note, included significant headwinds from foreign currency exchange rates. As always, we will strive to surpass our goals and we have great confidence in the continued, successful growth of TJX."
First half earnings up 4 percent
For the first half of fiscal 2018, net sales were 16.1 billion dollars, a 5 percent increase over last year. Consolidated comparable store sales for the period increased 2 percent. Net income was 1.1 billion dollars, while diluted earnings per share were 1.67 dollars, a 4 percent increase over the prior year's 1.60 dollars.
For the second quarter, the company's consolidated pretax profit margin was 10.7 percent, a 0.9 percentage point decrease compared with the prior year. Gross profit margin was 28.5 percent, down 0.9 percentage points versus the prior year.
Through its dividend program, under which the current dividend represents a 20 percent increase versus last year, the company said, it returned to shareholders 201 million dollars in the second quarter and 369 million dollars in the first half of the year.
Third quarter earnings expected to rise 18-20 percent
For the third quarter of fiscal 2018, the company expects diluted earnings per share to be in the range of 0.98 dollar to 1 dollar. This would represent an 18 percent to 20 percent increase over the prior year's EPS of 0.83 and an 8 percent to 10 percent increase over the prior year's adjusted 0.91 dollar, which excludes the combined 0.08 dollar impact of last year's debt extinguishment charge and pension settlement charge.
This guidance, the company said, reflects an assumption that wage increases will negatively impact EPS growth by 1 percent. The company also anticipates that the combination of foreign currency and transactional foreign exchange will positively impact EPS growth by 3 percent and that the change in accounting rules for share-based compensation will positively impact EPS growth by an additional 2 percent. This EPS outlook is based upon estimated consolidated comparable store sales growth of 1percent to 2percent.
For the 53-week fiscal year ending February 3, 2018, the company now expects diluted earnings per share in the range of 3.89 dollars to 3.93 dollars. This represents a 12 percent to 14 percent increase over the prior year's EPS of 3.46 dollars. The company's full-year guidance includes an expected benefit of approximately 0.11 dollar per share from the 53rd week in the company's fiscal 2018 calendar.
Excluding this benefit, the company expects adjusted diluted earnings per share to be in the range of 3.78 dollars to 3.82 dollars, a 7 percent to 8 percent increase over the prior year's adjusted 3.53 dollars, which excludes the combined 0.07 dollar impact of last year's debt extinguishment charge and pension settlement charge from GAAP EPS of 3.46 dollars. This guidance reflects an assumption that wage increases will negatively impact EPS growth by 2 percent. The company also anticipates that the change in accounting rules for share-based compensation will positively impact EPS growth by 2 percent. This EPS outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.
During the second quarter ended July 29, 2017, the company increased its store count by 51 stores to a total of 3,913 stores.