US Q2 in brief – Target, TJX, Dick's Sporting Goods
In the most recent second-quarter filings from US apparel and footwear brands and retailers, US department store giant Target booked an "encouraging" second-quarter as efforts to turn around its business appear to be paying off, while TJX Companies saw its net sales for the period increase 6%. Dick's Sporting Goods also reported increases in both sales and earnings in the second quarter, while Nordstrom saw an improvement in sales, beating company expectations.
US department store retailer Target booked what it called "encouraging" second-quarter results as efforts to turn around its business appear to be paying off. Sales increased 1.6% to US$16.4bn from $16.2bn last year, reflecting a 1.3% comparable sales increase combined with the benefit from sales in non-mature stores. Comparable digital channel sales grew 32% and contributed 1.1%. Net earnings meanwhile, slipped 1.2% to $672m from $680m in the year-ago period. Gross margin narrowed slightly to 30.5%, compared with 30.9% last year, reflecting increased digital fulfilment costs and the retailer's efforts to improve pricing and promotions.
TJX Companies CEO Ernie Herrman said he is "very pleased" with the company's second quarter results, as net sales for the period increased 6% to US$8.4bn from $7.9bn last year. However, net income slipped to $553m from $562.2m in the prior year period, while gross profit margin was 28.5%, down 0.9 percentage points versus the prior year. For the full year, TJX now expects diluted earnings per share in the range of $3.89 to $3.93 – a 12% to 14% increase over last year's EPS of $3.46.
Dick's Sporting Goods
Retailer Dick's Sporting Goods booked increases in both sales and earnings in the second quarter, with CEO Edward Stack hailing a "significant increase" in the company's bottom line from last year. For the 13 weeks to 29 July, net income reached US$112.4m from $91.4bn in the year-ago period. Net sales were also up, increasing 9.6% to $2.2bn from $2bn last year. Meanwhile, ecommerce sales for the second quarter of 2017 increased by about 19%.
Differential Brands Group, which owns the Robert Graham and Hudson Clothing brands, widened its net loss in the second quarter. For the three months ended 30 June, net loss was US$4.05m, compared to $3.6m for the prior year period. Net sales meanwhile, were up 13% to $36.5m from $32.4m last year, reflecting a 12% increase in wholesale segment sales and a 15% increase in consumer direct segment sales. The rises were driven by growth at Hudson Jeans and Robert Graham, as well as the addition of the Swims brands, and overall e-commerce sales growth of 38%. Gross margin expanded 590 basis points to 44.5% compared to 38.65% last year.
The challenging retail industry weighed on second-quarter results for JC Penney as it revealed a wider net loss of US$62m from $56m a year earlier. The company was, however, encouraged by an improved performance in its apparel business, including a significant acceleration in kids' apparel. Total sales were up 1.5% to $3bn, while comparable sales dropped 1.3%.
Nordrstrom has booked a marked improvement in sales on the prior quarter, beating previously issued company guidance, as they climbed 3.5% to US$3.7bn from $3.6bn a year earlier. Comparable sales increased 1.7%. Earnings, however, dropped to $110m from $117m, while retail gross profit narrowed 25 basis points to 34.1% as a result of higher occupancy expenses related to new store growth for Nordstrom Rack and Canada in addition to higher loyalty expenses during its anniversary sale. This was partially offset by improved merchandise margins.
Significant markdowns led to a "disappointing loss" for Dillard's in the second quarter. For the 13 weeks ended 29 July, net loss amounted to US$17.1m compared to net income of $12.1m in the year-ago period. Net sales were also down, slipping to $1.43bn from $1.45bn last year.
US department store retailer Macy's said its second-quarter results were in line with its expectations, and that it remains on track to meet its 2017 sales and earnings guidance. Earn