The overall performances of three sporting goods retailers tended to go the way of their clothing sales in the third quarter. Sector giant Foot Locker missed expectations and reported double-digit declines in U.S. apparel sales, but Dick’s and Hibbett each posted sturdy soft goods revenues and beat Wall Street expectations.
In the three months ended Oct. 31, New York-based Foot Locker Inc. recorded a loss of $6 million, or 4 cents a diluted share, compared with profits of $24 million, or 16 cents a share in 2008. The most-recent quarter included impairment charges of $22 million. Excluding such items, Foot Locker’s net totaled $16 million, or 10 cents a share. Analysts polled by Yahoo Finance had expected adjusted earnings per share of 13 cents.
Foot Locker’s sales fell 7.3 percent to $1.21 billion from $1.31 billion. On a conference call with investors, Ken Hicks, president and chief executive officer, said U.S. athletic apparel and athletic footwear comparable-store sales suffered double-digit declines in the quarter. In Europe, footwear and apparel sales were relatively flat, he said.
“I believe that improving our apparel business over time is a significant sales and profit opportunity at our company,” Hicks said. “Apparel is an area that [will] be receiving considerable focus in months ahead as we will look to deliver assortments that are more relevant for the consumer in today’s marketplace.”
Standard & Poor’s Ratings Services on Monday lowered Foot Locker’s corporate credit rating and ratings of the retailer’s unsecured debt one notch each, to “B-plus” from “BB-minus,” dragging them lower into speculative territory despite the maintenance of a stable outlook. S&P credit analyst David Kuntz said the move “reflects the moderate operational challenges due to persistent negative same-store sales and decline in the company’s credit protection measures.”
Tightened inventories, cost controls and an early drop in temperatures, meanwhile, led Dick’s Sporting Goods Inc. to more than triple its profits in the third quarter, the Pittsburgh-based retailer said.
In the three months ended Oct. 31, Dick’s posted net income of $18.9 million, or 16 cents a diluted share, compared with $6.2 million, or 5 cents a share, a year ago.
Sales in the period grew 7.1 percent to $989.8 million from $924.2 million. The company said hardlines, footwear and apparel all recorded positive comps in the quarter at its namesake stores.
The retailer’s top and bottom lines exceeded expectations on Wall Street. Analysts polled by Yahoo Finance anticipated earnings per share of 9 cents on $961.5 million in revenues, on average.
Edward Stack, chairman and ceo, said the firm benefited from a shift of cold weather product sales to the third quarter as a result of chillier temperatures versus last year.
“What’s really driving our apparel business has been the North Face product, which has been a great brand,” Stack said. “We’ve had success with some of the better Columbia product. So we haven’t seen a big deterioration in those AURs [average unit retails].”
In its third quarter, Birmingham, Ala.-based Hibbett Sports Inc. saw profits grow 14.7 percent to $8.8 million, or 30 cents a share, from $7.7 million, or 26 cents a share, a year ago.
Sales in the three months ended Oct. 31 climbed 4.1 percent to $145.9 million from $140.1 million in 2008.
Analysts had expected EPS of 24 cents on revenues of $144.2 million, on average.
Apparel and accessories both posted positive comps, the company said. The firm said its licensed apparel fell in the low-single digits in the quarter but branded apparel, led by the women’s and girls’ segments, grew in the mid-single digits. Chairman and ceo Mickey Newsome said that, like Dick’s, the firm’s North Face business had performed very well but the brand had company.
In apparel, “both Nike and Under Armour continue to perform extremely well,” Newsome said. “And we really feel good about where we are in apparel and equipment going forward. Both areas are performing at very high levels, and we expect that to go through the fourth quarter.”
The firm said it expects to post full-year EPS between 95 cents and $1.02 in January, implying fourth-quarter EPS of between 23 cents and 30 cents. Before the announcement, analyst had looked for fourth quarter earnings to equal 27 cents, on average.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion