With America’s election fever starting to cool today, retail’s financial set is getting down to business.
But business has just been OK.
Macy’s Inc. kicked off off what’s generally expected to be a blah third-quarter earnings season on a solid note today. The company outperformed expectations and posted a 4.3 percent rise in earnings. Profits rose to $145 million, or 36 cents a diluted share, from $139 million, or 32 cents, a year earlier.Wall Street expected the company’s earnings per share to fall to 29 cents.
Macy’s is generally seen as one of the winners in a retail landscape where the gulf between the leaders and the laggards is widening as consumers pick and choose their purchases carefully.
“There are a few things that are good for the consumer, confidence is improving, but it’s not off to the races,” said Marie Driscoll, a retail consultant. “We’re going to see modest opportunity for margin expansion on lower input costs [such as cotton], but top line, not so strong. It’s pretty promotional out there.”
Retail continues to be a market-share war.
“Gap has done well and Macy’s has done well, but meanwhile, J.C. Penney’s is just giving away share,” Driscoll noted. “In the aggregate, I don’t think [the overall landscape] is that great.”
As quarterly results roll out over the next two weeks, it will become clear who is gaining the most traction with shoppers.
Wall Street and retail stocks both gained ground Tuesday as Americans headed to the polls to vote on who will lead the country for the next four years.
Among the gainers were companies set to release results soon, including Gap Inc., up 1.6 percent to $35.94; Nordstrom Inc., 1 percent to $58.20; J.C. Penney Co. Inc., 0.8 percent to $23.53, and Macy’s, 0.5 percent to $41.38.
Gap has been on a tear lately, after a prolonged slump. Analysts project the firm’s third-quarter earnings per share jumped 60.5 percent to 61 cents. Nordstrom is also gaining ground, with earnings expected to rise 22 percent to 72 cents a share.
On the other end of the spectrum, Penney’s, which is revamping as a specialty department store, is expected to post quarterly losses of 5 cents a share, down from earnings of 11 cents a year earlier.
Results exclude special items such as restructuring charges and represent the current analyst consensus estimates reported by Yahoo Finance.
Matthew Boss, a broadlines retail analyst at J.P. Morgan, said there aren’t likely to be any big third-quarter surprises and that there was a quiet confidence building about the holiday season.
“Inventories as a whole are more or less in line and clean in the channel and that could be a positive for margins in the fourth quarter,” Boss said.
Arnold Aronson, managing director of retail strategies at Kurt Salmon, said retailers overall have held up pretty well considering the still-high rate of unemployment, volatile gasoline prices and political gridlock.
Aronson said there would be a chance for consumers to refocus after the election.
“We’re still a consumptive society,” he said. “There are a lot of people who might feel they have deprived themselves. The talk will be, ‘What are you shopping for?’ and ‘What’s the hottest?’ and ‘Who has the best prices?’ The conditions are going to be slowly but steadily improving.”
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