It was a big week for retail revenue.
Caleres, Shoe Carnival, Dick’s Sporting Goods, Hibbett, Macy’s, Nordstrom and Gap Inc. all reported results for the latest quarter. In some cases, companies revealed weak sales due to slowing demand in non-discretionary categories in a highly inflationary environment.
However, some retailers managed to stand out with better-than-expected results, despite the economic headwinds.
Here are our top three takeaways from this week’s reports:
Momentum for sporting goods
Sporting goods retailers in the second quarter appear to have bucked the trend of weak sales so far in the wake of slowing demand.
Dick’s Sporting Goods raised its 2022 guidance on Tuesday after reporting second-quarter results that beat analysts’ expectations. CEO Lauren Hobart said demand trends have remained relatively flat across all income demographics. Dick’s also said it avoided the labor and staff shortages that have plagued the entire retail industry.
“We are not seeing a significant decline in trading,” Dick CEO Lauren Hobart said on an investor call on Tuesday. “Our consumer is holding up very well.”
On Thursday, Hibbett Sports executives also said the retailer had largely avoided the problem of consumers turning to cheaper alternatives. Hibbett also sees benefits from his strategy of focusing on opening stores in “underserved markets,” where there is less competition between like-minded retailers.
Both companies highlighted their strong product assortment, which includes high-temperature products from Nike.
Weakness in clothing
Retailers specializing in clothing sales lowered their outlook after announcing their results for the second quarter, as consumers diverted spending away from non-discretionary categories.
Although it beat second-quarter profit expectations, Macy’s cut its full-year guidance, citing inflationary pressures.
Macy’s chief financial officer Adrian Mitchell said the retailer saw lower retail traffic in areas of weak apparel sales during the quarter as the consumer faces higher costs for goods. essentials, especially groceries. Pandemic-related categories, which include activewear, casualwear, sportswear, sleepwear and soft home, also continued to slow in the second quarter.
Nordstrom also lowered its full-year guidance, despite strong performance in the second quarter.
Gap Inc. withdrew its full-year financial outlook on Thursday, citing macroeconomic headwinds and a search for a new CEO, which is currently underway.
Gap inc. CFO Katrina O’Connell said on an investor call on Thursday that “signs of weak demand among low-income consumers are making it increasingly difficult to accurately forecast.”
Footwear retailers take advantage of back-to-school season
Shares rose for Shoe Carnival and Caleres, which owns Famous Footwear, after the two retailers reported second-quarter results this week. Both noted the benefits of the crucial back-to-school season.
Caleres President and CEO Diane Sullivan said the company expects “a strong back-to-school season,” while noting that consumers appear to have started shopping for this time later than usual.
She added that Caleres’ diverse portfolio of brands in various markets makes it “well positioned” to continue to grow, despite the current challenges in the macro environment. Caleres reiterated his full-year 2022 outlook and said he expects earnings per diluted share to be between $4.20 and $4.40, which would mark another record or near-record year. of profits.
Shoe Carnival said it has already posted strong back-to-school results. In an interview with FN, CEO Mark Worden noted that the company’s market gains on Thursday followed the company’s announcement of the highest three-day selling period in its history, during the re-entry. school this month.
Shoe Carnival confirmed its earnings guidance and expects EPS to be between $3.95 and $4.15 for fiscal 2022.