August 9th, 2012

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Nordstrom Q2 Profit Down

Thursday, August 9th, 2012

Nordstrom Inc. reported that its second-quarter net earnings were $156 million, or $0.75 per share, down from $175 million, $0.80 per share, for the same quarter last year.

Second quarter same-store sales increased 4.5 percent compared with the same period in fiscal 2011. Net sales in the second quarter were $2.92 billion, an increase of 7.4 percent compared with net sales of $2.72 billion during the same period in fiscal 2011. Total revenues for the quarter were $3.01 billion, up from $2.81 billion last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.74 per share on revenues of $3.02 billion for the quarter. Analysts’ estimates typically exclude special items.

Nordstrom said Over the last four years, it has more than doubled the number of Nordstrom Rack locations to its current total of 110 stores. Its initial plan for 15 store openings in 2012 remains and will increase to 24 openings in 2013. The company plans to have over 230 Rack stores by the end of 2016.The Company earlier announced a location for its first full-line store in New York City, with the opening expected in 2018.

For the third-quarter, the company expects Same-store sales growth to be high-single-digit. For the fourth-quarter, the company anticipates Same-store sales growth to be mid-single-digit.

Nordstrom raised its earnings per share guidance in a range of $3.40 -$3.50 for fiscal year 2012. While announcing the first-quarter result, the company had expected earnings per share of $3.30 to $3.45 for the full year. Analysts expect the company to report earnings of $3.45 per share for fiscal 2012.

The company now expects Same-store sales growth of 6 to 7 percent for fiscal 2012.

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French Connection warns of £7m H1 profit drop

Thursday, August 9th, 2012

UK clothing brand French Connection today (9 August) warned first-half operating profits would be £7m (US$10.9m) lower than last year as it resorted to additional discounting.

Ailing retailer French Connection has not managed to shed its financial woes, and has issued a statement that said revenue fell 7% over the half-year ended 31 July, and that gross margin was also lower as a result of additional discounting.

In today’s trading statement, the company said the supply agreement between LF USA and Sears for products branded “UK Style by French Connection” had been terminated following a change in strategy by Sears’ management. As a result LF USA had terminated its licence agreement for “UK Style by French Connection”.

The licence generated net income of £1.9 million in the year to 31 January 2012 but French Connection now expects that the income from the licence for the year to 31 January 2013 will be around £0.9 million. The company said a number of new licensing opportunities were currently being developed.

New licensing agreements include the recently-agreed French Connection children’s wear range and footwear, while opportunities in outerwear, accessories and furniture are currently the subject of advanced discussions.

The high street retailer said initial reaction to its winter range had been “encouraging” but it was “very cautious” in its outlook for the second half in light of the first six months. ”Our winter 2012 wholesale orders in UK/Europe are slightly below the levels at this time last year and we are working to increase the levels of in-season ordering to compensate for this,” the company said in a statement. “We are achieving continuing revenue growth in North America, offsetting the decline in UK orders to some extent.”

French Connection said that while the initial reaction to its winter collection has been “encouraging”, it is taking a very cautious outlook for retail revenue in the second half.

Founded in 1972 by Stephen Marks, French Connection set out to create well-designed fashionable clothing that appealed to a broad market. The company’s FCUK marketing campaign was controversial and dubbed by some to be tasteless and obnoxious, but proved to be very popular on a range of t-shirts with messages such as ” fcuk fashion”.

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Li & Fung core H1 profit drops 22%

Thursday, August 9th, 2012

Core operating profits at consumer goods giant Li & Fung fell 22% despite a slight rise in turnover, as the Hong Kong-based company was hit by continued economic fragility in its main markets.

However, the company said it remained committed to its target of $1.5bn in core operating profit by 2013, as envisaged in its three-year plan.

“While core operating profit is relatively weak in the first half of 2012, we are very focused on taking the necessary steps to improve the second half results and set the stage for 2013, the last year of our current three-year plan,” said Bruce Rockowitz, group president and CEO.

“We have continued to expand our business in Asia through LF Asia, and have concluded a number of new licensing agreements with major brands and retailers. It is also encouraging to see the cross-selling business among our three networks progressing so well.”

Group chairman William Fung said more acquisition deals at “attractive prices” were always available at a time of global economic uncertainty, signalling that the company would continue to expand through organic growth and acquisitions.

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Kohl’s Q2 profit falls on weak sales

Thursday, August 9th, 2012

US department store operator Kohl’s saw second-quarter net income decline on the back of “disappointing” sales. Although revenues fell short of market expectations, the bottom line came in four cents better than the Street was looking for. The department store chain anticipates slightly higher sales in the fall season, but trimmed its fiscal 2012 earnings.

Kohl’s reported a net income of $240m or $1 per share for the second quarter of 2012, from $299 million or $1.08 per share a year ago. On average, 20 analysts polled by Thomson Reuters expected earnings of $0.96 per share for the quarter. Net sales declined 1% to $4.21bn, from $4.25 billion in the prior-year quarter, while analysts were looking for revenues of $4.22 billion. Meanwhile comparable store sales for the quarter decreased 2.7 percent.

Kevin Mansell, Kohl’s chairman, president and chief executive officer, said, “Our sales performance in the second quarter was disappointing. Our gross margin performance for the quarter, however, was better than expected.”

Over the half, net income fell 21.2% to $394m as compared to $500m a year ago. Net sales increased 0.4% to $8.4bn, while on a comparable store basis, sales decreased 1.3%.

Based in Wisconsin, Kohl’s is a family-focused specialty department store. Kohl’s ended the quarter with 1,134 stores in 49 states, compared with 1,097 stores at the same time last year. The company expects to open an additional 12 stores in September.

Looking ahead to the third quarter, the company expects earnings of $0.83 – $0.89 per share, whereas 20 analysts estimate earnings of $0.88 per share. The guidance is based on total sales growth of 1 to 3 percent and comparable store sales growth of flat to 2 percent and includes expected third quarter share repurchases of $300 million.

Mansell further said, “We accomplished our goal of improving inventory levels for the fall season and our sales improved considerably in July as units were received. As we look forward to the fall season, we are excited about the fashion content and level of newness in our assortments.”

While announcing last week a 1.7 percent increase in comparable store sales and 3.4 percent increase in net sales for the month of July, Mansell had stated that the company has made significant progress in improving inventory levels as it enters the Back-to-School season.

Further, Kohl’s trimmed its fiscal 2012 forecast and now expects to earn $4.50 – $4.65 per share versus its earlier estimate of $4.75 per share. Analysts project annual earnings of $4.64 per share.

On August 7, Kohl’s board declared a quarterly cash dividend on the company’s common stock of $0.32 per share, payable September 26, 2012 to shareholders of record at the close of business on September 5, 2012.

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