Holiday Performance Pushes Outlooks up For Some, Fails to Move the Needle for Others

Print Friendly, PDF & Email

CEO

Coming off of a better-than-expected holiday period for retail in general, Kohl’s, Lululemon and The Children’s Place have all reported updated outlooks for their companies. Negative comps held Ascena and Destination XL back while J.C. Penney’s positive performance wasn’t enough to increase expectations. For the most part, the retailers are still assessing how the recent tax reform will impact their businesses.

Kohl’s

Kohl’s raises its full year guidance on a strong holiday sales performance.

The department store reported a 6.9% comparable sales increase over the prior year period.

“All lines of business and all regions reported positive comp sales. As expected, growth in digital demand accelerated significantly in the Holiday period from the year-to-date trend. In addition, we experienced positive sales in our stores driven by stronger traffic,” said Kevin Mansell, Kohl’s chairman, CEO and president.

Based on these strong results, the company now expects its FY 2017 diluted earnings per share to be $4.10 to $4.20, up from its previous outlook of $3.72 to $3.92. This does not include the impact from the tax reform bill, which it expects to produce a non-cash tax benefit.

J.C. Penney

J.C. Penney reported comp store sales increased 3.4% during the holidays, prompting the retailer to reaffirm its full year guidance.

“We are very encouraged with our overall comp sales performance during the holiday season, which was led by home, beauty and fine jewelry. Additionally, our apparel categories continue to demonstrate improved comp performance, particularly in women’s and kids,” said chairman and CEO Marvin Ellison. “We are also pleased by our e-commerce business that continues to outpace prior year results with double-digit sales growth, largely driven by sought-after gifting categories such as fine jewelry, home decor and luggage, toys, boots and athletic footwear. Our ability to execute e-commerce fulfillment from 100 percent of our brick and mortar stores helped fuel the growth in e-commerce for the holiday season.”

The company previously pegged its comp store sales outlook for the year between down 1 percent and flat. Its adjusted earnings per share is expected to fall between 2 cents and 8 cents.

Ascena

Ascena announced a 3 percent decrease in comp store sales company wide.

The retailer reported flat comps for Lane Bryant and a 4 percent uptick in comp sales for the Justice children’s wear retailer. The company saw the biggest losses for Dressbarn, which reported a 13 percent drop, and Catherines, which decreased by 7 percent. Maurices and Ann Taylor were both down by 6 percent while Loft was down by 1 percent.

“While holiday performance was mixed across our brand portfolio, we were pleased with the continued comp acceleration at Justice, along with the significant trend improvement at both LOFT and Lane Bryant, which were five points better than the prior quarter. As we discussed in our December call, we are aggressively addressing merchandising issues at dressbarn, and anticipate trend improvement as we get into the Spring season,” said CEO David Jaffe.

Based on this performance, the company affirmed its second quarter outlook of a 7 cent to 12 cent loss per share, excluding any impact from the recent tax reform.

Lululemon

Though no specific sales numbers were released, Lululemon has increased its guidance for the fourth quarter, ending Jan. 28, based on its holiday performance.

The company anticipates net revenue will be in the $905 million to $915 million range, up from $870 million to $885 million, based on comp sales in the high single digits.

Diluted earnings per share are pegged between $1.24 to $1.26, an increase from the initial outlook of $1.18 to $1.21.

“We are thrilled with our performance this holiday season that reflects an accelerating trend across all parts of our business, and we look forward to continued momentum in 2018 and beyond,” CEO Laurent Potdevin said.

The updated guidance does not take the recent tax reform into account.

The Children’s Place

Strong sales propelled The Children’s Place through the holidays.

The children’s retailer reported an 8.5% comp sales increase on top of a 6.9% increase during the same period last year.

“Our product assortment, supported by a foundation of superior design, sourcing and merchandising capabilities, clearly continues to resonate with our customers. All of our key retail selling metrics increased—AUR, ADS, UPT, transactions and conversion. And importantly, our sequential improvement in store traffic versus the third quarter of 2017 and the fourth quarter of 2016 was significant,” president and CEO Jane Elfers, said.

On these results, the company has updated its outlook for the fourth quarter to a diluted earnings per share in the range of $2.45 to $2.50, up from its initial guidance of $2.07 to $2.12. For the full fiscal year, the company now expects diluted EPS to be in the $7.83 to $7.88 range, which is an increase over its previous outlook of $7.46 to $7.51.

The updated guidance does not factor in tax reform.

Destination XL

A surge in sales in December lead Destination XL to positive performance during the holidays.

The big and tall men’s apparel retailer reported a 3 percent increase in comp sales. Total sales for the nine-week period increased 3.5% to $101.3 million, compared to $97.9 million during the same time last year.

The company affirmed it will achieve the low end of its fiscal 2017 guidance, which is sales between $466 million and $470 million.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register

Recent News

Tommy Hilfiger on Innovation, Instant Gratification and Courting the Instagram Generation

Tommy Hilfiger credits his brand's staying power to tapping into the fountain of youth, whether that means teaming with Gigi Hadid or jumping on nascent AI technology.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more

Maersk and IBM Forming Blockchain Joint Venture to Digitize Supply Chains and Improve Trade Flow

A.P. Moller - Maersk and IBM said they intend to establish a joint venture to provide more efficient and secure methods for conducting global trade using blockchain technology.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more

Norway’s Move to Ban Fur Farms Brings Praise and Criticism

In a move that was both political and a recognition that fur has fallen out of fashion even in a nation that was once the world’s top producer of fox pelts, Norway’s government has decided to phase out fur farms by 2025.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more

See How Walmart is Positioning to Move at the Speed of Innovation

Despite its smaller, nimbler competitors, Walmart is determined to be a disruptor in this new retail landscape and its technology incubator Store No. 8 is leading the charge.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more

5 Trends Taking Over the Latin American Footwear Market for Fall ’18

As Brazil continues to emerge from its economic crisis and shoppers are starting to spend again, women’s fashion footwear trends are channeling some of that same cautious but confident energy.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more