Wal-Mart Stores Inc. posted a midsingle-digit decline in apparel sales and The TJX Cos. Inc. missed Wall Street’s profit mark for the first quarter, but both firms said they’re ready to compete as apparel prices rise.
From the dominant mass player and the top off-pricer, that counts as fair warning to the rest of the apparel world. Both companies have the country blanketed with stores and have spent years burnishing their low-price bona fides for just such a moment — when higher cotton and labor costs across the sector meet shoppers who are contending with lofty unemployment, a weak housing market and high food and fuel prices.
“From Brazil to Silicon Valley, I’ve visited more than 75 stores in this quarter,” said Mike Duke, Wal-Mart’s president and chief executive officer. “Everywhere I go, I see customers working hard to make ends meet. Inflation and gas prices are adding to the pressures.”
Wal-Mart plans to help alleviate that pressure with its low-price business model, but has yet to find the right formula for apparel.
First-quarter profits attributable to the Bentonville, Ark.-based company rose 3 percent to $3.4 billion, or 97 cents a diluted share, from $3.3 billion a share, or 87 cents, a year earlier. Adjusted earnings of 98 cents beat analyst expectations by 3 cents a share.
Revenues for the quarter ended April 30 increased 4.4 percent to $104.19 billion from $99.81 billion. Wal-Mart’s stock fell 0.9 percent to $55.54 as the S&P Retail Index rebounded from its 2 percent decline on Monday with a 0.1 percent advance to 536.96.
Comparable-store sales fell 1.1 percent at Wal-Mart’s U.S. discount division as traffic to the stores slowed and apparel posted a midsingle-digit decline, with the greatest weakness in children’s, women’s and shoes. Plus-size women’s apparel comped up as the discounter expanded its assortment in the area, part of a broader effort to reverse an earlier streamlining that turned off shoppers. “We’re investing in prices,” said Bill Simon, president and ceo of the U.S. discount division, indicating the retailer will pay up to offset higher supply costs. “We recognize that customers are seeing higher prices across the industry for cotton-related apparel.”
Up against a strong quarter last year, off-pricer TJX’s net income fell 19.8 percent to $266 million, or 67 cents a diluted share, from $331.4 million, or 80 cents, a year earlier. Adjusting results for costs related to the shuttering of the A.J. Wright division, earnings of 78 cents fell 2 cents shy of analysts’ expectations.
The Framingham, Mass.-based company, which operates TJ Maxx and Marshalls in the U.S., drove sales up 4.1 percent to $5.22 billion from $5.02 billion with a 2 percent comp gain and increased foot traffic to its stores.
“We see the uncertainty in the marketplace about sourcing and pricing as an opportunity for our business,” said Carol Meyrowitz, ceo. “The key for us is relative value. If other retailers pass on cost to consumers and our pricing umbrella rises, this should allow us to drive merchandise margins while maintaining our value gap.”
If other retailers absorb rising costs, Meyrowitz said TJX could adjust its product mix, keeping prices down and sustaining margins.
Shares of TJX closed at $52.06, down 4.1 percent for the day.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)