Holiday Season Tough for Large Industry Retailers
Holiday was hardly cheery for some as the lackluster approach to shopping many retailers saw play out last year continued during the key selling period.
Several corporate updates were released Monday ahead of companies’ respective presentations this week in Orlando for the annual ICR investor conference.
“Condensed peaks of increased consumer activity over Black Friday weekend, just before Christmas, and in the week following Christmas were more than offset by significant decreases in consumer activity outside of those event-driven peaks, producing a slightly softer holiday season for us overall than we originally anticipated,” Tilly’s Inc. President and CEO Ed Thomas said in a statement Monday.
Shopper Procrastination at Tilly’s
Tilly’s Inc.’s sales for the nine-week period ended Dec. 30 fell 7.4% from a year ago to $139.7 million.
The decline, on a channel basis, was led by a 12.3% drop in physical store net sales, with the Midwest, New England, and Northwest markets down by percentages in the single-digits. All other markets were down in the double-digits.
Same-store sales for the nine-week period were down 9%.
On a category basis, footwear offered a bright spot for Tilly’s with comparable sales up by a single-digit percentage during the nine-week holiday period.
Other categories were more challenged, with Tilly’s reporting girls and men’s apparel down in single-digit percentages. Boys, women’s, and accessories all saw double-digit percentage declines.
The results prompted Tilly’s to revise its guidance downward for the fiscal fourth quarter, which ends Feb. 3.
Sales in the current quarter are now estimated to be between $169 million and $172 million, which compares with earlier guidance of $172 million to $178 million. The company’s now projecting a loss in the fiscal fourth quarter of between 20 cents to 24 cents, which is up from an earlier estimate of a loss per share in the range of 12 cents to 20 cents.
Zumiez Down in North America
Zumiez saw a similar buying pattern for its holiday business.
The retailer’s net sales for the nine weeks through Dec. 30 declined by 4.4% and was led by a slump of 6.6% in the North American market.
Same-store sales for the December period fell 5.9%.
Zumiez CEO Rick Brooks said sales began to slow after the Black Friday/Cyber Monday sales periods.
“While the adjustments we’ve made to our merchandise assortments have positively impacted high-demand shopping days, it hasn’t been enough to offset sustained periods of softer than normal traffic patterns,” Brooks said.
The company expects net sales and earnings per share to come in at the low end of guidance released last year. Net sales in the current quarter are estimated to be $275 million to $281 million and earnings per share of 24 cents to 34 cents.
Journeys a Drag for Genesco
Journeys parent Genesco Inc. said Monday comparable sales, inclusive of physical stores and e-commerce, were down across its portfolio by 4% for the nine weeks ended Dec. 30.
Journeys, which is in the process of closing underperforming stores and turning around its business, saw comparable sales down 6% during the holiday selling period.
“Following a positive start to the holiday season, sales decelerated in the weeks approaching Christmas, as consumer shopping trends remained choppy and peak shopping days were not enough to offset the lulls in between,” Genesco Chair, President, and CEO Mimi Vaughn said in a statement. “This was most pronounced at Journeys, where store results were pressured despite our more promotional stance.”
Vaughn said Journeys customers were not as interested in boots, which typically do well and comprise a large part of the winter merchandise mix.
The disappointing sales prompted the company to adjust its per share guidance for the fiscal year ending Feb. 3 to 65 cents to 85 cents, with the footwear company likely to be towards the middle of that range. It previously was guiding earnings per share of $1.50 to $2.
Urban Outfitters Falls 13%
Struggling Urban Outfitters saw comparable sales down 13% in the two months ended Dec. 31 as sister brands Free People and Anthropologie notched gains.
The retailer has been challenged in stocking its stores with the right product, but newly hired Urban Outfitters North America brand president Shea Jensen is expected to help lead the business out of its slump.
Jensen, whose hiring was announced Monday, officially joins the company Feb. 5. The executive is the former president of Good American.
Overall, parent Urban Outfitters Inc. ended the two-month holiday selling period with net sales up 10% and comparable sales rising 6%.
Crocs Performance Prompts Guidance Lift
Crocs Inc. bucked the general downward trend, issuing upbeat revised fourth-quarter guidance Monday based on better-than-expected results during the holidays.
Companywide revenue in the quarter is now projected to be up 1% year over year, compared to a previous estimate of down 1% to 4%.
The revised growth guidance is driven by an expected 10% increase in revenue from the Crocs brand. Meanwhile, Heydude is projected to be down 19% in the current quarter.
Crocs Inc. is guiding a full-year revenue increase of more than 11% to about $3.95 billion, which is up from a previous estimate of up 10% to 11%.
“2023 was a strong year for Crocs Inc. that culminated in a successful holiday season with market share gains for both brands,” CEO Andrew Rees said in a statement.