But as has been the case for much of the past three years in retail, there was more bad than good. Store closures ramped up, department stores continued to grapple with digital shifts, and profits took sizable hits.
Here, we round up four things we learned in the most recent quarter.
The Department Store Struggle Is Real
JCPenney, Nordstrom and Macy’s were among the department stores to produce disappointing results during the first quarter.
JCPenney widened its Q1 net loss to $180 million, or 58 cents a share, while its net sales fell 3.6 percent to $2.71 billion. As expected, investors punished the stock, sending shares tumbling more than 9 percent on the heels of the release.
The stock of competitor Macy’s took an even greater hit, falling more than 12 percent on May 11 after the chain posted a sales decline of 7.5 percent.
Nordstrom saw a 1.7 percent dip in sales at U.S. and Canadian full-line stores and Nordstrom.com, as well as an overall comparable-sales decline of 2.8 percent.
Meanwhile, Canada-based department store conglomerate Hudson’s Bay Co. this quarter announced its plans to lay off 2,000 workers as it grapples with lackluster sales and profits.
The Strong Stay Nimble
Popular footwear and apparel powerhouses Nike, Caleres and Steve Madden kept industrywide challenges at bay for the most part in Q1, with Caleres remaining characteristically agile, and Nike and Steve Madden producing blockbuster quarters.
Last week athletic giant Nike blew past Wall Street’s earnings forecasts — albeit helped by tax rates and a lower average share count more than company efforts. Earlier in the period, Steve Madden produced a sales rise of 11.2 percent to $366.4 million, surpassing analysts’ bets of $359.5 million. Madden’s adjusted net income, at $27.5 million, or 47 cents per diluted share, topped consensus estimates of 43 cents for adjusted diluted earnings per share.
Also, with help from its booming international business, Skechers USA Inc. produced its first billion-dollar quarter in Q1.
Store Closures Remain a Threat
While retail stakeholders hope the bulk of mass store closures are in the rearview, a handful of fashion firms in Q1 added their names to the list of companies shuttering doors.
One notable such brand is Michael Kors, which said on May 31 that it would close around 100 to 125 full-price outposts over the next two years. (Michael Kors reported earnings for its fourth quarter, while most other brands/retailers reported first-quarter results.)
According to Michael Kors chairman and CEO John Idol, the firm grappled with heavy promotions as well as company-specific challenges, leading Q4 sales to tumble 11.2 percent to $1.06 billion.
Adding fuel to the fire, the company’s outlook for the year ahead was also dismal. For the first quarter of fiscal 2018, the firm anticipates total revenue of between $910 million and $930 million, and a comparable sales decrease in the high-single-digit range. Diluted earnings per share are expected to be in the range of 60 cents to 64 cents. Analysts had expected the firm to predict revenues of $950 million and diluted EPS of 75 cents.
Profits Aren’t Keeping Up
What do Shoe Carnival, Journeys and DSW have in common? In the first quarter, it appeared to be slipping profits.
Shoe Carnival and Journeys both blamed delays in income tax refunds, in addition to other company-specific factors, for their shortcomings.
Genesco’s prize horse Journeys, for example, continued to grapple with shifts in consumer demands in the first quarter as management worked toward updating the retailer’s assortment to better reflect the changing tastes of its target demographic. (Genesco said last year that it had stocked a heavy assortment of canvas sneakers at a time when its target customer was seeking more retro styles.)
Meanwhile, Shoe Carnival’s profits tumbled 23 percent to $8.2 million, or 48 cents per share, missing consensus bets for earnings per share of 50 cents.
Off-price footwear seller DSW said its Q1 profits fell 23 percent year-over-year to $23 million, or 28 cents per diluted share. Adjusted profits slipped to $25.7 million, or 32 cents per diluted share, missing analysts’ forecasts for diluted earnings per share of 35 cents.