Bankrupt shipping giant trying to ease cargo chaos fears
Hanjin Shipping Co., the world’s seventh-largest container shipper, is working to ease the potential cargo chaos caused by its bankruptcy filing last week.
The filing rose concerns among some of the nation’s biggest retailers that some merchandise may not arrive in time for the crucial holiday season, blooomberg.com reported.
Hanjin is seeking stay orders in 43 countries around the globe to protect its vessels from being seized due to legal actions by creditors, according to the report.
“The government is trying to extinguish the most immediate fire,” Kim Tae Il, a research analyst at the Korea Maritime Institute in Busan, told Bloomberg. “This is going to help ease some of the bottlenecks in the supply chain. So those toys held up in container boxes will be able find their way to consumers.”
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Athleisure giant to open smaller store model
Lululemon Athletica Inc. revealed that it plans to open smaller, “local” stores amid results that disappointed Wall Street.
Net revenue for the quarter ended July 31 increased 14% to $514.5 million, just shy of projections, from $453.0 million in the year ago period. Total comparable sales rose 4%, with in-store sales up 3% and direct to consumer sales up 6%.
Net income increased 12.5% to $53.6 million.
The company issued third-quarter sales guidance of $535 million to $545 million, compared with the Street forecast for $542 million.
"Our progress in the second quarter, especially in gross margin and inventory, marks the beginning of our recovery in profitability and sustainable long-term growth,” stated Laurent Potdevin, CEO, lululemon.
On the retailer’s quarterly conference call with analysts, Potdevin revealed lululemon plans to open smaller, “local” stores, ranging from 1,000- to 2,000-sq.-ft., the Financial Post reported. The first such local store opened in Fort Collins, Col., on Aug. 20, and the response has been overwhelmingly positive, according to Potdevin.
“These innovative, hyper-local community stores will allow us to come to life in front of influencer communities that we would not otherwise reach, offering events and programming that are relevant to the local community,” he said on the call
As of Jul 31, 2016, lululemon operated a total of 379 stores. For all of fiscal 2016, it expects to open 42 stores, up from previous guidance of 40 stores.
Genesco cuts outlook
Changing footwear trends took a bite out of Genesco Inc.’s sales in the second quarter.
The company reported net income of $14.6 million, up from a year-earlier profit of $7.5 million.
Genesco’s revenue for the second quarter, ended on July 30, fell 4.6% to a less-than-expected $625.6 million.
Total same-store sales fell 1%, with a 4% decline at the Journeys Group.
“We experienced a sudden shift away from many of the core styles that have fueled Journeys' strong performances in recent years,” said Robert Dennis, CEO of Genesco, which operates more than 2,800 l stores and leased departments throughout the U.S., Canada and Europe under assorted banners, including Journeys, Schuh, Lids, and Johnston & Murphy. “We were able to offset the effect this headwind had on our bottom line through a meaningful improvement in Lids Sports Group and continued strength at Johnston & Murphy combined with share repurchases over the past year."
Dennis sounded a warning note about the third quarter, saying it was off to a difficult start driven largely by the impact of the fashion shift at Journeys during the height of the back to school season. The company’s same-store sales for the third quarter through Saturday, August 27, 2016, are down 5% from the same period last year.
"Based on our comparable sales trend and expectations for sustained challenges due to the fashion rotation at Journeys and conditions at Schuh (its U.K. brand), we are lowering our full year outlook,” he said. “We now expect adjusted diluted earnings per share for the fiscal year ending January 28, 2017, in the range of $3.80 to $4.00, compared to our previously issued guidance range of $4.80 to $4.90."