Retail’s first-quarter fever might have finally broken — or at least eased somewhat.Wal-Mart Stores Inc., Ross Stores Inc. and Gap Inc. all posted results that showed at least some signs of stability, something retail has been desperately lacking as mall traffic slips, shoppers turn their focus from fashion to experiences and Amazon gains ever-more market share.The results, which were greeted by investors with stock market gains, comes after a week that featured a nearly unbroken string of strained, very strained or downright awful first-quarter reports from department and specialty stores.Shares of Wal-Mart rose 3.2 percent to $77.54 and investors, in after-market trading, pushed Gap up $3.1 percent to $23.90 and Ross ahead 3.7 percent to $63.33.But that brief respite doesn’t necessarily signal better times ahead.The more positive read on the market came from the world's largest retailer, an off-price stalwart and a resurgent specialty store juggernaut, all of which were expected, or hoped, to fare relatively well.And for every sign of strength, there seemed to be multiple signs of weakness elsewhere in the market.The starkest came from Ascena Retail Group Inc. The 4,900-door retailer cut its forecast and warned late Wednesday that operating conditions would “remain challenging for the next 12 to 24 months.” Investors reacted by sending the stock down 27 percent to $2.07 on Thursday, leaving the firm with a market capitalization of just $395.9 million. Bon-Ton Stores Inc. also continued to suffer the woes of a department store and saw its stock slip 2.1 percent to 69 cents on Thursday.L Brands Inc.’s sales showed the continuing strain of its move last year to exit swim and apparel, but the intimate apparel and beauty retailer promised better times ahead. Investors generally accepted that pledge and pushed the stock up 2.7 percent to $49.69.Much of the debate around the future of fashion has centered around how companies can work with, compete against or otherwise get around the multibillion-dollar e-commerce machine that is Amazon.The retailer bested analyst expectations by delivering solid results for the first quarter ended April 30, although profits declined 1.3 percent to $3.03 billion due to an increase in tax rate. Earnings per share, however, rose to $1 from 98 cents a year earlier, topping the 96 cents projected by analysts. Net sales increased 1.4 percent to $117.5 billion, from $115.9 billion in the 2017 first quarter.Wal-Mart U.S. comp-store sales rose 1.4 percent, driven by a traffic increase of 1.5 percent. Comp traffic increased 3 percent on a two-year stacked basis. E-commerce growth at Wal-Mart U.S. was strong with sales and GMV increasing 63 percent and 69 percent, respectively.The majority of the growth was organic, the company said, occurring through walmart.com.Without naming Amazon, McMillon boasted about Wal-Mart U.S. e-commerce performance.“We like the traction at Wal-Mart U.S. e-commerce,” the ceo said and, in a reference to Amazon’s $99 a year Prime membership for unlimited free shipping, added, “We made changes to the shipping terms, there’s no more fee to get free shipping and we’re offering pick-up discounts on non-store items that are shipped to stores. It saves customers money on their orders. Walmart.com now has 50 million first- and third-party items compared to 10 million at this time last year.“We’re moving faster to combine digital and physical assets,” said McMillon. “We also see plenty of room to improve. We need to scale e-commerce faster and improve store counts.”McMillon noted that Wal-Mart is “gaining critical category expertise in higher-margin areas like shoes and apparel. We’re not planning to buy our way to success. The acquisitions are helping us speed some things up.”Spearheading the effort is Marc Lore, founder of Jet.com, which Wal-Mart bought in a $3 billion-plus deal last year that has spurred on a number of acquisitions.Wal-Mart, of course, lives at the lower end of the market, which has been an area of strength for other retailers as well. Rival Target Corp. on Wednesday also reported better-than-expected results.Gap was buoyed by its Old Navy division and posted a better-than-expected 12.6 percent increase in first-quarter net income to $143 million. Diluted earnings per share of 36 cents compared with 32 cents a year earlier. Sales in the period ended April 29 were flat at $3.4 billion, though comparable sales were up 2 percent.Comparable sales by division came in as follows: Old Navy Global comp sales rose 8 percent, while Gap Global and Banana Republic Global comps both fell 4 percent.The San Francisco-based specialty retailer also reaffirmed its full-year diluted earnings-per-share guidance to be in the range of $1.95 to $2.05. The company continues to expect comps for fiscal year 2017 to be flat to up slightly.“We are pleased with our positive comp and earnings growth this quarter,” said Art Peck, president and ceo. “We’ve made substantial improvements in product quality and fit, and our increasing responsive capabilities are enabling us to better react to trends and demand.“While the retail environment continues to be challenging, we are focused on delivering the best possible product and customer experience, and our ability to leverage a portfolio of iconic brands and operating scale uniquely positions the company for long-term growth.”[caption id="attachment_10890568" align="alignnone" width="650"] A Ross web advertisement.[/caption]At Ross Stores, the power of the off-price model in the current market was on full display.The firm posted net earnings of $321 million for the first quarter, up from $291 million a year ago, on sales that grew to $3.3 billion, a 7 percent increase over last year. Comparable store grew by 3 percent.Diluted earnings per share also came in at 82 cents compared with 73 cents in the first quarter of 2016.Chief executive officer Barbara Rentler called the quarter’s growth “respectable...despite the uncertainty and volatility in the external environment.”Ross is one of very few retailers to come out of the first months in 2017 in a better position than last year. Off-price competitor TJX Stores is another, but the larger operator tallied more marginal growth.The positive first quarter comes after Ross saw annual earnings grow by 10 percent in 2016, hitting $1.1 billion, and said in March that it's moving ahead with plans to open 90 new locations this year, comprised of 70 Ross stores and 20 Dd’s Discounts stores.Long-term, the company plans to operate 2,000 Ross locations and 500 Dd’s throughout the U.S. There are currently 1,561 stores in operation in 37 states.Looking ahead to the second quarter, which goes through the end of June, Rentler expects the company's comp-store sales to grow between 1 percent to 2 percent, compared to a 4 percent gain last year.Ross also projected earnings per share to hit as much as 76 cents, up from 71 cents during last year’s second quarter. For the full year, earnings should come in between $3.07 to $3.17, compared to last year’s $2.83.On the losing end was Bon-Ton, which is seeking to reverse its string of losses and declining sales by intensifying its localization strategy this year and hoping to benefit as competitors close stores.“Our localization strategy remains a key differentiator,” said Kathy Bufano, Bon-Ton’s outgoing president and ceo.The strategy is called “Close to Home” and it involves selling products from small local makers. “We will continue to grow Close to Home with expansion to 100 doors by fall and 175 by year-end,” Bufano said during a conference call Thursday with investors, after the company reported a disappointing first quarter.Bon-Ton’s net loss in the first quarter ended April 29 grew to $57.3 million, or $2.86 a diluted share, from a net loss of $37.8 million, or $1.91 in the year-ago period. Net sales fell 9.3 percent to $536.1 million from $591 million and comparable-store sales fell 8.8 percent.For Bufano, it’s been a challenging three years at the helm, though the company was losing money before she arrived from Belk.Earlier this month the ceo said she will resign on Aug. 25 and turn the reins over to William Tracy, chief operating officer. During Thursday’s call, Bufano said it was her decision not to renew her contract and that she believes she “laid the foundation for future progress” including introducing new brands and expanding existing vendor relationships.
In honor the @CFDA’s announcement of @iamnaomicampbell receiving the Fashion Icon Award at the 2018 #CFDAAwards, which will take place on June 4, here’s a #tbt of the supermodel on @michaelkors’ runway in 1991. #wwdfashion #wwdarchive (📷: George Chinsee)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech during @sxsw for @createcultivate in partnership with @fossil. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.