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Earnings Rewind: H&M and Finish Line Disappoint, Saks Drives Gains for HBC and More

Here, your earnings recap for the week.

Hennes & Mauritz AB

Hennes & Mauritz AB on Tuesday saw its first-quarter profit plunge 44 percent to 1.37 billion Swedish kronor, or $170 million, noting a tough start to its transition year. For the prior-year period, those figures were 2.46 billion kronor.

“The weak sales development, combined with substantial markdowns, had a significant negative impact on results in the first quarter,” CEO Karl-Johan Persson said in a statement. He added that the fast-fashion retailer’s spring clothing sales had been adversely affected by the prolonged cold weather. To clear inventory it was unable to sell, the company expects to post significant markdowns in the following months.

Sales for the period dipped 1.7 percent to 46.18 billion kronor. H&M projected that this year’s online sales and those from new businesses will grow by more than 25 percent.

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Shoe Carnival Inc.

Posting fourth-quarter sales that missed expectations, Shoe Carnival Inc. announced on Tuesday an outlook that suggested minimal revenue growth in the year ahead. The company cited a pullback in promotions and challenges from last year’s hurricane seasons, reporting a comparable store sales decline of 0.5 percent and sales of $243.2 million. Although representing a gain of 9 percent over the previous same period, the numbers fell short of forecasts of sales of $248.2 million.

Net losses were $3.9 million, or 24 cents per diluted share. On an adjusted basis, net income was $1.7 million, or 11 cents per diluted share, topping analysts’ bets for diluted earnings per share of 9 cents.

President and CEO Cliff Sifford described 2017 as a transitional year for the shoe retailer as it worked to “[refine] our strategic direction to create an even more fun, exciting and memorable experience for our customers, with the goal of engaging them across our omnichannel offering to position us for growth over the next several years.”

For the full year, revenues held steady at $1 billion, while comparable sales edged up 0.3 percent. Net income fell 20 percent year over year to $18.9 million, or $1.15 per diluted share. Adjusted net income dropped 5 percent to $24.5 million, or $1.49 per diluted share.

Hudson’s Bay Co.

On Wednesday, Hudson’s Bay Co. reported improved fourth-quarter earnings, bouncing back from last year’s Q4 net loss to post net income of $84 million in Canadian dollars. Although it continues to face challenges with other banners, its Saks Fifth Avenue business posted its third consecutive comparable sales gain, advancing 2.1 percent after suffering a rough patch in recent years.

Consisting of Hudson’s Bay, Lord & Taylor and Home Outfitters, its Department Store Group saw comparable sales fall 2.6 percent. At HBC Europe, comps declined 3.4 percent, and HBC Off Price logged a 7.6 percent decline.

Overall, retail sales were CA$4.7 billion, an increase of 2.1 percent from the prior year. Although HBC governor and executive chairman Richard Baker noted that he was not pleased with the firm’s recent performance, he expressed hope in its efforts to capitalize on the value of its real estate portfolio as well as the recent appointment of HBC CEO Helena Foulkes.

PVH Corp.

PVH Corp. saw its stock rise after-hours on Wednesday after revealing fourth-quarter earnings that beat analysts’ expectations. Driven by the momentum in both Tommy Hilfiger and Calvin Klein businesses, the firm noted that revenue increased 19 percent to $2.5 billion, compared with the prior-year period.

Tommy Hilfiger reported sales growth of 22 percent to $1.1 billion, while Calvin Klein’s revenue rose 23 percent to $977 million.

Net income for the quarter ended Feb. 4 was $123.7 million, or $1.58 per share — up from $97.7 million, or $1.23 per share in the same period last year. PVH’s adjusted earnings per share came in at $1.58.

For the full year, revenue also climbed 9 percent to $8.9 billion. Earnings per share were $7.94.

“We continued to make investments that centered around areas most impacted by the changing dynamics in the industry — the growing prominence of digital, the importance of having a nimble and responsive supply chain and our ever-present commitment to driving consumer engagement,” CEO and chairman Emanuel Chirico said in a statement. “We believe that the incredible brand power behind Calvin Klein and Tommy Hilfiger positions us well in the marketplace against our competition and will drive continued momentum.”

Finish Line Inc.

Just a few days after European giant JD Sports Fashion Plc announced its acquisition of Finish Line Inc., the U.S. athletic retailer posted fourth-quarter sales that missed the mark.

While overall sales were $561.3 million, an increase of 0.7 percent over the prior year, same-store sales fell steeper than expected at 7.9 percent. Continuing to show strength, the company’s Macy’s business reported an increase of 8.5 percent.

For the period ended March 3, the retailer reported net income of $16.3 million, reversing its loss from the year-ago period. Diluted earnings per share were 40 cents, which included impact from impairment charges and store-closing costs and the company’s revaluation of its deferred tax liability as a result of the Tax Cuts and Jobs Act. On an adjusted basis, earnings per share were 59 cents.

“While we anticipated that our business would be under pressure during the fourth quarter due to a difficult selling environment for athletic footwear, sales ended up being down more than we forecasted,” CEO Sam Sato said in a statement.

For the full year, Finish Line’s net sales were $1.84 billion, a decrease of 0.3 percent from the prior-year period.

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