NEW YORK — Two of the hottest hands in apparel retailing Tuesday ushered in this week’s reports on same-store sales with top-notch results that, while probably not typical, were unquestionably encouraging.
Continuing to defy the assumption that double-digit comparable-store sales increases are a thing of the past, Chico’s FAS checked in with a 16.5 percent comp increase for the month, as overall sales skyrocketed 41.7 percent to $65.9 million, while the more youthfully oriented Pacific Sunwear of California saw its comps swell like a post-storm surf, gaining 13.4 percent as overall sales bounded 22.2 percent to $89.6 million.
Both advances came on top of double-digit comp gains in June 2002 and sent the companies’ stocks to new 52-week highs. Chico’s roared to the New York Stock Exchange’s finish line, closing up at $2.83, or 12.8 percent, at $24.93 after hitting $25.82 in intraday trading. On the Nasdaq, PacSun briefly hit $28.35 before settling in at $28.28, up $1.88 or 7.1 percent.
They also helped to lift the market capitalizations of other retailers in the process. The Standard & Poor’s Retail Index rose 2.5 percent, to 343.94, as the Dow Jones Industrial Average and the S&P 500 managed increases of just 0.1 percent and 0.3 percent, respectively.
Both Chico’s and PacSun were able to drive sales by sticking to their own unique business plans — Chico’s, by reaching out to an underserved misses’ market and an effective loyalty program, and PacSun, by offering its teen customers the brands they crave.
The two companies released their monthly sales tallies earlier than the rest of the industry because of their participation in the CIBC World Markets Consumer Conference in Boston. The majority of U.S. retailers are expected to report results on Thursday.
PacSun, based in Anaheim, Calif., said its 13.4 percent comp increase came from a 12.5 percent rise at PacSun stores and a 23.1 percent jump at Demo. Comps improved by double digits in each week. Women’s did best at the PacSun stores, but footwear and accessories also registered double-digit comp gains. Its young men’s business posted a 1.4 percent comp increase, and although the most sluggish unit, it is still outperforming industrywide weakness.Top sellers for young women were short-sleeved T-shirts, tanks, sweatshirts, wovens, shorts and pants, while the young men’s showed strength in sweatshirts, T-shirts and denim pants.
At Demo, girls’ and accessories again led the business with comps up strongly in double digits while the men’s business posted a less powerful but still double-digit comp increase.
Carl?Womack, chief financial officer, said on a prerecorded conference call that merchandise margins for May and June were higher than last year. PacSun also notched up second-quarter guidance by 3 cents to 23 cents for the three months ended July 1. Last year, PacSun reported diluted earnings per share of 15 cents.
Chico’s, headquartered in Fort Myers, Fla., said of its 16.5 percent comp gain that a strong response to the company’s July catalog in the fourth and fifth week of June lifted comps more than 30 percent during those weeks. Comps increased in the low-double-digit range in the first and second week, but were down in the low-single digits in the third week.
The company said it expects comps to be at least in the high-single-digit range in July.
Raising her earnings estimates for both PacSun and Chico’s, Lauren Levitan, a retail analyst with SG Cowen, said both companies’ results were very impressive. “There is the tough environment out there,” she commented. “Yet it is still possible for companies to outperform.”
In a telephone interview, Pat Murphy, Chico’s chief merchandising officer, said of the store’s customer: “I think she knows that we never let her out of our sight. It is about focus and seeing what she is doing with her life and hearing what she has to say. No one needs to buy clothes, but she has to see something she can’t resist and so hopefully we can keep her excited. It is really all about being able to find something fresh and new.”
Murphy said the company is selling a lot of its merchandise at regular price and noted color and novelty have been selling well, helping the stores look fresh and inviting.
“No one has the luxury of four different closets in her house. I think we are really trying to pay attention to the whole thing — tops that work with bottoms, and color and proportions that work together.”Additionally, Mothers Work, the Philadelphia-based maternity retailer, said its comps in June slipped by 0.6 percent, but noted that June’s results were hampered by the fact that this year’s month had one less Saturday than last year’s.
Rebecca Matthias, president and chief operating officer, said that comps for the May-June period, encompassing nine Saturdays in both years, were up 2 percent. The company noted it now expects to meet or exceed the high end of its previous third-quarter earnings guidance of $1.35 to $1.45 a share. The firm is scheduled to report results for the quarter ended June 30 on July 22.
Last month, the maternity retailer retained The Joester Loria Group, a licensing and marketing agency, to expand the Motherhood Maternity brand beyond apparel and to bring a new subbrand, Motherhood Baby, into baby-related categories such as diapers, strollers, baby food and apparel.
“We see more than 2.5 million of the 4 million pregnant mothers each year,” Matthias said in a recent telephone interview. “We have intense relationships with them for six months and they come to know our brands in a very intimate way. We also know our customers go on and buy other baby-related products and we want to continue that relationship by extending the brand into other products, which is also a great way for manufacturers and other retailers to have access to our customers.”
The licensing and marketing program for the MW brands will be available in all retail channels. The firm operates 972 maternity locations, including 821 stores and 151 leased departments, under the nameplates Motherhood Maternity; A Pea In The Pod, and Mimi Maternity. MW leases space from Federated Department Stores, Babies ‘R’ Us and other retailers.
The Motherhood Baby program will include product for newborns to 2 years old, and will target a broad range of retail outlets. Motherhood and Motherhood Baby products are expected to roll out nationally starting in fall 2004.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty