USA Q2 in brief – Carter’s, Columbia Sportswear Company, Skechers USA
Here are the latest Q2 filings from U.S. footwear and apparel companies:
“After a strong start to the year, our sales slowed in the second quarter,” said Michael Casey, president and CEO of Carter’s.
For the three months ended July 2, net sales decreased $45.7 million, or 6.1%, to $700.7 million, due to lower retail sales and wholesale in the United States, partially offset by growth in its international sales. Net retail and wholesale sales in the United States fell 11% and 3%, respectively. International net sales increased 7%, while US retail comparable net sales decreased 8%. Changes in the exchange rates used for translation in the second quarter of fiscal 2022, compared to the second quarter of fiscal 2021, had an unfavorable effect on consolidated net sales of approximately $2.3 million, or 0.3%. Net income was $37 million, compared to $71.6 million in the second quarter of fiscal 2021. Adjusted net income was $52.1 million, compared to $73.7 million last time.
Casey added that Carter’s has revised its outlook for the remainder of the year to reflect business trends and market risks related to inflation and the related impact on consumer demand. For fiscal 2022, the company expects net sales of approximately $3.25-3.3 billion and adjusted operating income of approximately $415-440 million, compared to $500.8 million for the 2021 financial year.
Columbia sportswear company
Columbia Sportswear Company said net sales rose 2%, or 4% in constant currency, to a record $578.1 million for the second quarter ended June 30, from $566.4 million at the same period last year. The increase in net sales mainly reflects growth in the United States, Canada, direct in Europe, Japan and Korea, partially offset by a substantial decline in net sales from distributors based in Russia and China. Net income, meanwhile, fell 82% to $7.2 million from $40.7 million last time. Gross margin contracted by 240 basis points to 49.2%, compared to 51.6% for the comparable period in 2021. The gross margin contraction was mainly due to higher inbound freight costs and lower wholesale margins, partially offset by a favorable channel and regional sales mix.
The company’s financial outlook for 2022 calls for net sales to increase 10-12% to $3.44-3.5 billion. Previous forecasts called for a 16-18% increase to $3.63-3.69 billion. Net income is now expected to be between $315 million and $340 million, down from earlier guidance of $363 million to $382 million.
Skechers reported record quarterly sales of $1.87 billion for the three months ended June 30, marking a 12.4% year-over-year increase. This increase is the result of a 15.4% increase in domestic sales and a 10% increase in international sales, mainly attributable to strong wholesale sales. All segments experienced growth, with wholesale growing by 18.3% and direct-to-consumer by 4.3%. At constant exchange rates, sales increased by 16.4%. Net profit was $90.4 million, down from $137.4 million last time. Gross margin was 48.1%, a decrease of 330 basis points, mainly due to higher unit transportation costs partially offset by average selling price increases.
Skechers estimates that for fiscal 2022, it will achieve sales between $7.2 billion and $7.4 billion.
Levi Strauss & Co
Reporting its results for the three months to May 29, Levi Strauss & Co said net revenue of US$1.5 billion increased 15% on a reported basis and 20% at constant currencies, excluding 47 million dollars of unfavorable foreign exchange effects. Direct-to-Consumer (DTC) net revenue increased 16%, driven by company-operated stores. Net profit, meanwhile, fell to $49.7 million from $64.7 million in the same quarter a year earlier, mainly due to a drop in operating profit to $76 million. compared to $107 million the previous year. Levi Strauss attributed the drop in operating profit to $60 million in charges related to the Russian-Ukrainian crisis. Adjusted net income was $117 million, compared to $93 million in the same quarter a year earlier. Gross margin was 58.1% of net revenue, down from 58.8% last time.
The company reaffirmed its expectations for fiscal 2022 with net revenue growth of 11-13% from fiscal 2021, between $6.4 billion and $6.5 billion.