It’s the variable that just won’t go away.
Weather continues to drive the inventory planning and overall business strategy of many footwear and apparel companies, but its predictability has seemed increasingly challenging of late. The recent wave of unseasonable weather — an unusually warm winter — left inventories high going into spring. And now, experts say Mother Nature’s identity crisis could spill over into the current season as well as the summer.
Read on for three ways weather will impact spring and summer trends.
An Unseasonably Cold Spring?
UBS Investment Bank analyst Michael Binetti hosted a call with Weather Trends International CEO Bill Kirk to discuss his updated ’16 weather outlook and the potential impact to retail stock. Binetti said that while March has been among the warmest on record — favorable for general retail traffic and boon to sales for items like sandals, T-shirts and shorts — a potentially colder April and May could have the opposite effect on traffic and spring trends.
Similarly, Cowen and Co. analyst Oliver Chen noted that a cooler, drier April — coupled with the absence of the Easter holiday boost — could be a drag on retail.
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The Eye Of The Storm
Some forecasts have already labeled the 2016 hurricane season a very active one. Retailers with a presence in coastal regions, particularly the Gulf Coast and Florida, will be most impacted should a substantial hurricane make an appearance or a wave of tropical storms sends people running for cover.
While lighter storms disrupt footwear and apparel sales throughout the season, a massive hurricane can create longer-term crises stemming from extensive damage and destruction of homes and business.
“Excessive heat this summer (July to August) should drive strong sales of summer merchandise, but a late start to back-to-school,” said Cowen and Co. analyst Oliver Chen.
Chen said record heat, set to begin in late June and last through August, could create a headwind for early back-to-school sales, particularly for tax holiday events.
“A hot summer could drive sustained solid sales in warm weather categories — good for most softlines retailers,” Binetti noted. “But if weather remains unseasonably hot until fall, key categories like jeans/fleece could see a slow start at back-to-school.”