Home Deport surges amid higher-than-expected sales, profit
The Home Depot is closing in on the $100 billion mark in annual sales.
The Atlanta-based retailer posted a 6.4% increase in same-store sales in the United States, and 5.8% overall, for the quarter ended Jan. 29.
CEO Craig Menear credited merchandising mix and digital prowess for the chain’s better-than-expected fourth quarter performance, which saw sales increase to $22.2 billion in the fourth quarter, up 5.8% from 21.0 billion in the same quarter last year.
As the Home Depot closes in on the $100 billion mark for annual sales, the Atlanta-based retailer rang up a fourth quarter comparable-store sales stat of 6.3% in the United States, and 5.8% overall.
CEO Craig Menear credited merchandising mix and digital prowess for the performance, which saw sales increase to $22.2 billion in the fourth quarter, up 5.8% from 21.0 billion in the same quarter last year.
For the full year, sales increased to $94.6 billion, up 6.9% from $88.5 billion last year.
“Our focus on providing localized and innovative product selection, improving the interconnected customer experience, and driving productivity resulted in record sales and net earnings for 2016,” said Craig Menear, chairman, CEO and president. “Our associates responded to a healthy housing market and strong customer demand.”
The company released guidance for its 2017 fiscal performance, highlighted by expectations fo 4.6% sales growth — for nets ales and comp-store sales. The retailer expects to add six new stores next year — up from its current figure of 2,278.
Home Depot also expects capital spending to reach about $2.0 billion in 2017.
Another department store retailer misses
Slowing mall traffic continued to slow Dillard’s sales in the fourth quarter.
Net income for the quarter ended January 28, 2017, was $56.9 million compared to net income of $84.0 million in the year-ago period. Included in the amount is an after-tax asset impairment of $4.2 million on a cost method investment.
Net sales for the period were $1.94 billion, down from $2.07 billion last year. This missed analyst estimates of $1.999 billion.
Same-store sales also decreased 6% for the period. Although all sales categories declined during the quarter, better performing categories relative to the total trend were ladies' apparel and men's apparel and accessories. Weakest performing categories were home and furniture and shoes. Sales were strongest in the Eastern region followed by the Western and Central regions, respectively.
For fiscal 2016, the department store chain reported net income of $169.2 million down from $269.4 million for the prior year 52-week period.
Net sales for the 52 weeks were $6.257 billion compared to $6.596 billion last year. Same-store sales also decreased 5
“Our operating results reflect another quarter of mall traffic declines from continued retail industry challenges,” said Dillard’s CEO, William T. Dillard, II. “In response, we are ramping up our efforts to bring more distinctive brand and service experiences to Dillard’s, both in-store and online. Our strong balance sheet provides us support in these challenging times, and during the year we returned $256 million to shareholders.”
As of Jan. 28, the chain operated 268 Dillard’s locations, 25 clearance centers spanning 29 states and an e-commerce operation. Total square footage at Jan. 28, 2017 was 49.2 million.
Macy’s Q4 earnings slump, but still beat analysts expectations
Store closures, layoffs and shifting consumer preferences weighed down Macy’s bottom line, negatively impacting its fourth quarter earnings. And the retailer doesn’t see its slump ending in the near future.
Macy's net income fell to $475 million in the quarter ended Jan. 28, compared with $544 million in the year-ago period. Adjusted earnings per share came to $2.02, better than analysts had expected. Analysts had expected $1.95 per share for the quarter, according to FactSet.
Macy’s sales fell 4.0% to $8.51 billion for the quarter, less than expected. Same-store sales on an owned plus licensed basis for the fourth quarter were down 2.1%, beating analysts predicted 2.2% drop.
Sales in fiscal 2016 totaled $25.8 billion, down 4.8% from $27.1 billion last year. Comparable sales on an owned plus licensed basis for fiscal 2016 declined by 2.9%.
For the current year, Macy’s total sales are projected to decline 3.2% or 4.3%, reflecting the closure of 66 stores last year. Same-store sales are expected to fall 2% to 3%.
“While 2016 was not the year we expected, we made significant progress on key initiatives that are starting to bear fruit,” said Terry Lundgren, Macy’s chairman and CEO who will step down March 23 as chief executive and be succeeded by president Jeff Gennette. “These include continued improvement in our digital platforms, the rollout of our new approach to fine jewelry and women’s shoes, an increase in exclusive merchandise and the refinement of our clearance and off-price strategy. We also took a big step forward in rightsizing our physical footprint and restructuring our entire organization. The combination of these initiatives will help us gain market share, return to growth and drive enhanced value for our shareholders over time.”
As the company evaluates how to invest for the future in 2017, it will continue looking at the challenges in the retail environment and changing consumer shopping behaviors.
“We know we must evolve our strategy and execute faster,” Lundgren said. “Key to this is enhancing the customer experience in our stores where we are developing and testing concepts that feature new merchandise and entertainment options alongside enhanced technology to make shopping simpler.
Additional initiatives that Macy’s said will improve sales trends in 2017 include continued omnichannel improvements, an updated marketing strategy and a simplified pricing structure.
The company is also focused on the execution of its real estate strategy.
“Overall, real estate transactions in fiscal 2016 generated cash proceeds of approximately $675 million, which is helping to fund continued reinvestment in the business,” Lundgren said.
Macy’s also plans on advancing its Brookfield partnership and “continuing to monetize locations that have closed or are plan to close,” Lundgren added. “We are also developing strategies that will help create value for Herald Square while making the store an even more vibrant retail experience.”