HR Quarterly Round-Up: Bulgari, Macy's, Nordstrom

A yellow gold, diamond, pearl and emerald necklace from the Bvlgari Heritage Collection

(Photo: Catherine Bigelow/SFGate.com)

Bulgari Loss Narrows on Sales of Necklaces, Perfume (Businessweek): Bulgari SpA, the world’s third- largest jeweler, reported a narrower first-quarter loss on rising sales of necklaces and perfume.

Macy's Swings to Profit, Aided By Move to Meet Local Demand (MarketWatch): Department-store operator Macy's Inc. on Wednesday said it swung to a better-than-expected $23 million first-quarter profit, helped by its strategy to tailor stock to local demand.
 
Nordstrom 1st-Qtr Net Rises, But Misses Street view (Reuters): Nordstrom Inc (JWN.N) said its first-quarter net profit rose 43 percent over last year, but it missed analysts' forecasts and shares fell after hours.

HR Quarterly Round-Up: Nordstrom, Macy's, Liz Claiborne

(Photo: Kyle Ericksen/WWD)

Nordstrom's 4Q Profit More Than Doubles (NY Times): Carrying less inventory helped upscale retailer Nordstrom Inc. more than double its second-quarter profit compared with a year earlier, though it tempered its sales outlook for 2010 and its profit results fell slightly short of forecasts.
Lower Costs Lead Macy's To 4Q Profit (Crain's New York Business): Macy's Inc. returned to a fourth-quarter profit Tuesday as lower expenses helped the department store operator even as sales dipped.
 
Liz Claiborne quarterly sales, forecast miss view (Reuters): Liz Claiborne Inc. reported a fourth-quarter loss that matched analysts' expectations but sales and a first-quarter forecast that fell short, hurt by weak sales at wholesale and at its Mexx store chain.

HR Quarterly Round-Up: Macy's Inc., Nordstrom, Bulgari

(Photo: Reuters/Rick Wilking)

Macy's Holiday Outlook a Turkey, Stock Drops (Reuters): "U.S. department store operator Macy's Inc (M.N) forecast earnings for the fourth quarter, which includes the crucial holiday shopping season, far below Wall Street expectations on Wednesday, sending shares down 8.1 percent."

Nordstrom 3Q Profit Rises But So Do Costs (NYT): "Department store operator Nordstrom Inc. said Thursday that its profit rose 17 percent in the third quarter even though its costs were higher than expected as shoppers began spending more."

Bulgari Climbs to 14-Month High After Earnings Beat Estimates (Bloomberg): Bulgari SpA, the world’s third- largest jeweler, rose to a 14-month high in Milan trading as some brokerages raised their targets on the stock following third-quarter earnings that beat analysts’ estimates.

October Same-Store Sales Roundup

U.S. retailers posted October same-store sales that offered a mixed bag of results, indicating that retail is in for a disappointing holiday season.

Despite total U.S. comp. sales rising 2.1% in October, the largest increase since July 2008 according to the International Council of Shopping Centers (ICSC), 52% of retailers reported October sales that came in below Wall Street estimates, according to Reuters. 

"October results are not going to give investors the overall warm and fuzzy that we're on track for a strong Christmas," said Brean Murray, Carret & Co analyst Eric Beder, "It looks like we're on track for kind of a mediocre season right now based upon October." (SOURCE: Reuters.com)

However, some industry analysts are optimistic. ICSC projects Nov. same-store sales to rise 5-8%, and holiday same-store sales to rise 1%.

The teen retail sector delivered an October surprise to analysts, claiming the "worst performer" title for the month. Aeropostale Inc. underperformed, posting same-store sales gains of 3% vs. the 14% rise analysts' estimated. Comps at American Eagle Outfitters Inc. sunk 5%, missing the 2% gain analysts projected for the company. As a result, shares in both companies dropped 13.6% and 12%, respectively, with Aeropostale experiencing its biggest one-day decline since Dec. 2008.

High end appears to be on the rise with a 1.8% increase in comp. sales in Oct. for the luxury sector, according to ICSC.

“The improvement in the stock market has had a significant impact on the affluent shopper’s willingness to spend as the luxury market has shown its first positive reading since May 2008,” said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers.  (SOURCE: WWD.com)

Saks Inc. reported a comp. sales gain of 0.7% for the month, beating analysts expectations. The luxury chain reported "experienced continued weakness" in their Saks Fifth Avenue stores, however OFF 5TH and Saks Direct flourished. Management projects mid to high single digit declines in comps. for the second half of 2009.

Nordstrom, Inc. delivered a 6.5% increase in same-stores sales for the month, which topped estimates.

October comp. sales for Neiman Marcus slid 6.0%. Same-store sales in their Specialty Retail Stores segment, which includes Neiman Marcus and Bergdorf Goodman stores, fell 6.2%. Neiman Marcus Direct, which includes their online and catalog operations for Neiman, Bergdorf and Horchow, decreased 4.8%.

Abercrombie & Fitch Co. continues to struggle, posting a loss of 15% for the month, slightly worse than estimates.

Macy's Inc. reported a 0.8% dip in same-store sales, slightly higher than the 0.1% decline analysts predicted according to Thomson Reuters. Online sales (macys.com and bloomingdales.com), which were up 34.6% for the month, helped the company's comp. sales by 0.6 percentage points.

Limited Brands, Inc. posted a 4% decrease in comp. sales for October, falling short of analysts' estimates of a 3.1% decline. Same-store sales losses in Victoria's Secret Stores and La Senza, 6% and 7% respectively, helped drive down Limited's comps.

Nordstrom 2Q Profit Drops 27%; Raises Guidance

Nordstrom meets Street, raises guidance

Thu Aug 13, 2009 4:49pm EDT

SAN FRANCISCO (Reuters) - Nordstrom Inc (JWN.N) posted a steep decline in quarterly profit on Thursday that nevertheless met Wall Street's expectations, as the upscale department store chain controlled inventory and expenses to offset languishing sales.

The company raised its profit forecast for the fiscal year based on what it called better-than-expected performance in its second quarter. The quarter included three major sales campaigns, making it Nordstrom's second-largest in terms of net sales.

Nordstrom's net profit fell 26.6 percent to $105 million, or 48 cents per share, in the fiscal second quarter ended August 1, compared with $143 million, or 65 cents per share, a year earlier.

That matched the 48 cents per share expected, on average, by analysts, according to Reuters Estimates.

Sales fell 6.2 percent to percent to $2.14 billion, a touch above the $2.12 billion expected by analysts. But same-store sales, a key measure of sales at stores open at least one year, fell 9.8 percent.

For fiscal 2009, Nordstrom estimated earnings of $1.50 to $1.65 a share, with same-store sales falling by 9 percent to 12 percent.

An earlier forecast called for earnings per share of $1.25 to $1.50. Wall Street had been expecting fiscal 2009 earnings per share of $1.48.

Nordstrom shares fell less than 1 percent to $29.52 after closing up 1 percent at $29.76 on the New York Stock Exchange.

(Reporting by Alexandria Sage; Editing by Richard Chang)

(SOURCE: Reuters.com)

July Same-Store Sales Roundup

As The Four Tops sang, "It's the same ol' song..." for the U.S. retail industry.

For the 11th consecutive month, U.S retailers reported flat same-store sales, with many missing analysts' estimates. An unseasonably cool July and tax-free holidays pushed back to August, due to the Labor Day holiday falling late, were contributing factors to the decline in sales.

Although sales were down 5%, the results were on track with industry expectations and "consistent with the recent trends seen in May and June", according to Michael P. Niemira, chief economist of International Council of Shopping Centers (ICSC). In a telephone interview with Bloomberg, Mr. Niemera said, “Although July doesn’t look much different than June or even May, I think it will probably mark the turn in the industry towards better performance from here on out".

Apparel and Department Stores continue to be the worst performing sectors, however there were a few bright spots. Gap, Inc. and Macy's, Inc., posted better-than-expected 2nd quarter earnings, sending their shares to rise. Gap's shares saw it's biggest gain since Nov. 21. Limited Brands beat analysts' estimates, which caused shares to rise 15%, it's largest gain since Oct. 28.

Improvements in gross margin and expense reductions contributed to retailers’ ability to report second-quarter profit above estimates, according to Liz Dunn, an analyst at Thomas Weisel Partners LLC in New York. (Source: Bloomberg.com)

The S&P Retail Index rose 1.4%.



Here's the July Apparel/Dept. Store same-store sales roundup:

Limited Brands beat company and analysts' expectations, posting a 7% same-store sales decline for July. The company expects August comp. sales to decline in the high single-digits.

July same-store sales for Macy's, Inc. dropped 10.7%, above Thomson Reuter's analysts' estimates of a 9.1% decline. Total sales for July totaled $1.377B, a decline of 10.7% in comparison to sales of $1.543B for the same four week period ended in Aug. 2, 2008. Minus restructuring costs, Macy's, Inc. said it expects 2nd quarter earnings of $0.15 to $0.17 per share.

Gap Inc. posted an 8% same-store sales decline for July compared to an 11% drop in July 2008. Total sales were $924M, down 7%. Sabrina Simmons, CFO of Gap Inc., said the company expects earnings per share for the 2nd quarter to be between $0.30 and $0.32.

Dillard's comp. sales slid 12% coming above analysts' estimates of 10% declines. Total sales were down 15% for the month to $439,086,000.

Abercrombie & Fitch continues their downward spiral, with same-store sales falling 28% for July. Total sales for the month were down 22% to $236M. The company believes sales were negatively affected by a shift in the timing of tax-free holidays, and later back-to-school dates.

Nordstrom's same-store sales results dropped 6.9%, beating Wall St. estimates of a double-digit decline. Total sales slid 4.1% to $809M.

Saks slightly beat estimates, reporting a 16.3% decline in comp. sales. Analysts surveyed by Thomson Reuters estimated a 16.6% decline. Sales for the month totaled $159.7M, a 14.9% decrease.

Same-store sales for Neiman Marcus were down 27.3% to $195M for the month. Total sales decreased 25.8% to $199M. The company reported weakness across all merchandise categories and regions.

June Same-Store Sales Roundup

An unusually rainy June combined with weak consumer confidence and a rise in U.S. unemployment, lead to the tenth consecutive month of weak same-store sales for U.S. retailers.

With the unemployment rate at a 26-year high of 9.5%, consumers choose to focus on necessities and discount items, forgoing discretionary purchases. This has retailers concerned about the upcoming back-to-school sales, which gives retailers a preview of what holiday sales will look like:

“You’re going to have a lot of the clearance stuff still on the floors, and that’s going to counteract any traction in the full-price merchandise for back-to-school,” Brian Sozzi (analyst at research firm Wall Street Strategies in New York) said today in a telephone interview. (Source: Bloomberg.com)

"It could be a very difficult back-to-school shopping season," Ken Perkins, Retail Metrics president said. "If that's the case, it's going to be a negative harbinger for what we see for the holidays." (Source: Reuters.com)

Here's the apparel retail June same-store sales roundup:

Macy's June same-store sales were down 8.9%, slightly under Wall Street estimates. Results were consistent with management expectations and the company's year-to-date sales trend.

Dillard's reported soft comp. sales for June, posting a decline of 14%. Analysts predicted a 10.4% drop in same-store sales.

June same-store sales for Limited Brands dropped 12%, coming below the company's expectations of a high single digits decline. Wall St. estimated a 7.9% loss. Semi-Annual sales at both Victoria's Secret and Bath & Body Works negatively impacted sales, along with higher promo activity prior to this year's sales events. V.P. of Investor Relations, Amie Preston, said the company expects July comp. sales to fall in the low double digits.

The biggest loser in the high-end/luxury sector was Abercrombie & Fitch, whose June same-store sales plummeted a whopping 32%. Analysts projected comps. would decline 26.6%. Pressure from lower-priced competitors Aeropostle and Buckle has forced A&F to reconsider its stance against lowering prices according to The Wall Street Journal.

Nordstrom beat analysts' estimates, reporting a 10% drop in June same-store sales.

One of the biggest surprises was Saks Fifth Avenue which, after six consecutive months of same-store sales losses in the high double digits, beat analysts' estimates by posting a 4.4% percent dip in June comp. sales compared to their predictions of a 11.8% decline. But don't break out the bubbly just yet. The low sales drop was due to the company's shift of their designer sales event from May to June. So, once again, it's all about the big discount, much to Saks' chagrin.

Neiman Marcus June same-store sales fell 20.8% with the company experiencing weakness across all geographies and merchandise categories.

A Sparkle of Light in March Same-Store Sales Reports

The apparel retail sector has reason to be a little hopeful today. Although retail same-store sales dropped in March, the declines were less than expected signaling an upturn in consumer confidence.

Reuters reports that more than half of the retailers that posted March sales, topped Wall Street estimates. Thomas Reuters' same-store sales index reports overall sales were down 1.8%, thanks to lower-than-expected sales growth from Wal-Mart. However, sans Wal-Mart's figures, sales fell 5%, slightly beating the 5.2% decline analysts predicted.

"The numbers are still soft, but given the deluge of negative news we have seen in the retail space over the last several months, it's got to be somewhat encouraging," said Ken Perkins, president of Retail Metrics Inc. "It looks like there is a little bit of an uptick, some pent-up demand ... for some discretionary spending." (Source: Reuters)

Investors responded to the encouraging news, pushing the Standard & Poor Retail Index up 4.6%.

The Easter shift from March to April negatively affected March sales results:

"The overall tone for March was actually stronger than the reported sales performance," said Michael P. Niemira, ICSC chief economist and director of research. "Sales performance was dampened due to several factors, two of which were calendar related; the first being a calendar-month shift that caused there to be one less Saturday in March compared with last year and the second being that Easter falls three weeks later this year, on April 12, as opposed to March 23 last year," said Niemira. "These shifts created an unfavorable month-over-month comparison with March of 2008. If we adjust for the calendar shifts sales for March were stronger than reported, in fact, up about 1 percent," Niemira added. (Source: ICSC)

Abercrombie & Fitch was the biggest loser with March same-store sales falling 34%, due to the company's continued resistance to discounting their merchandise in order to protect their brand's image. Comp. sales were weakest in week 3 and and stronger in weeks 4 and 5 reflecting the Easter shift. Weeks 4 and 5 were positively impacted by Spring clearance event. Across all brands, jeans, fragrance and fleece were the strongest categories. Comparable sales were down across all U.S. regions and Canada.

Macy's Inc. reported a 9.2% declined in same-store sales for the month of March, slightly beating Wall St. predictions of a 9.3% decline. Online sales (which include macys.com and bloomingdales.com and are included in same-store sales results) had another good month with a sales increase of 17.9% in March and 17.1% year-to-date. All figures were in line with management's expectations. Due to the Easter holiday falling in April instead of March, the company advises that the March-April period should be viewed together.

Limited Brands, Inc. reported March same-store sales decreased 9%, beating the company's expectations of a "low double digit decline" as well as analysts' estimates of a 12% decrease. The company projects mid-single digit same-store sales declines for April.

However, the struggle continues for the luxury sector.

Neiman Marcus was the worst performer in the sector, reporting same-store sales drop of 29.9% for March. The company said it experienced weakness across all regions and merchandise categories.

March Same-store sales fell 23.6% for Saks Fifth Avenue, missing Wall St. estimates of a 20.3% decline. The luxury chain experienced weakness across all merchandise categories, while Saks Direct and OFF 5TH showed strength.

Nordstrom beat analysts' estimates of a 16% decline, posting a same-store sales drop of 13.5% in March. The company reports that while the Nordstrom Rewards triple point event for Nordstrom cardholders had a favorable affect on sales, the positive results were offset by the shift in the Easter holiday from March to April. Rob Campbell, treasurer and vice-president of investor relations, said that cosmetics and junior women apparel were their strongest categories.

Apparel Sales Continue To Suffer Despite Overall Industry Increase

U.S. retailers reported their same-store sales for February and the results were better than expected.

Reports show overall retail industry same-store sales increased 0.3%, beating analysts' predictions of a decline of 1.3%, according to Thomson Reuters. The increase was due to Wal-Mart clobbering expectations by posting a 5.1% same-store sales increase, as well as retailers controlling inventory.

A few retailers beat Wall Street estimates by either posting gains, or posting declines that were less than expected. Aeropostale reported an 11% increase in same-store sales which was higher than the 6.9% increase analysts predicted. Gap Inc. said sales fell 12%, beating estimates of a15.4% decline. Limited Brands Inc., the parent company of Victoria's Secret, dropped 7% which was better than analysts' estimate of a 7.6% drop.

So, is this a sign that the apparel sector is beginning a turnaround? Not necessarily. Despite these bright spots, reports show that apparel was down 5.6% and department stores declined 9% compared to the previous year.

Macy's Inc. reported same-store sales down 8.5% for February, more than the 7.3% analysts predicted but within management's expectations. However, online sales -- which include macys.com and bloomingdales.com -- increased 16.2%.

Luxury retail continues to struggle the most as a result of consumers opting for food and necessities instead of discretionary items like high end clothing. The International Council of Shopping Centers reports February same-store sales for luxury stores dropped 19.2% compared to a 0.1% drop of all the chains it monitors.

Saks Inc. was the worst performer in the sector with a 26.8% drop in same-stores sales in February, experiencing weakness across all merchandise categories, particularly women's apparel. Eveningwear, fragrance, women's and men's accessories and their OFF 5TH stores showed relative strength for the month.

February same-store sales for Neiman Marcus tumbled 20.9% with weakness in across all regions and merchandise categories.

Nordstrom, Inc. reported February sales decline 15.4%, more than the 13.6% drop analysts predicted.