Tough going for three specialty retailers
L Brands, The Cato Corp., and The Buckle reported decreases in same-store sales, although one still managed to sound an upbeat note about its second quarter.
L Brands, parent company of Victoria's Secret, reported net sales of $767.7 million for the four weeks ended July 29, 2017, down from $777 in the year-ago period. Total same-store sales fell 7%. Same-store sales fell 10% at Victoria’s Secret and rose 1% t at Bath & Body Works. The retailer said its decision to exit the swim and apparel categories had a negative impact of about 4 percentage points and 5 percentage points to total company and Victoria’s Secret comparable sales, respectively.
L Brands said it expects second-quarter profit at the high end of its previous forecast range of 40 cents to 45 cents per share.
L Brands, through Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri Bendel, is an international company. The company operates 3,077 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China
The Cato Corporation reported sales of $56.1 million for July, down 8% from the year-ago period. Same-store sales for the month were down 9% to the prior year.
Sales for the second quarter ended July 29, 2017 fell 13% to $205 million. Second quarter same-store sales were down 14% to prior year.
"Our negative sales trends persisted in July and the decline in sales continues to put severe pressure on merchandise margins and profitability," commented John Cato, chairman, president, and CEO.
We expect a loss for the second quarter and full year earnings to be significantly below last year.
The Cato Corporation operated 1,374 stores in 33 states, compared to 1,373 stores in 33 states as of July 30, 2016.
At The Buckle, same-store sales in July decreased 8.4%. Net sales decreased 9%.
Comparable store net sales for the 13-week second quarter ended July 29, 2017 decreased 7.7%. Net sales for the quarter fell 7.8% to $195.7.
The Buckle currently operates 463 retail stores in 44 states, which includes the opening of one new store during fiscal July in Sparks, Nevada.
Sugarfina gets backing to expand
Sugarfina is looking to expand its luxury candy offerings, online and in stores.
The company announced it has closed a $35 million growth equity financing from Great Hill Partners, bringing Sugarfina's total funding to over $50 million. The new funding will be used to continue scaling the brand across retail, digital, wholesale, and corporate gifting, and to expand internationally to the Middle East, Europe, and Asia. Sugarfina will begin its overseas expansion in early 2018.
A recipient of Chain Store Age's 2016 Breakout Retailers Awards, Sugarfina launched online in the summer of 2012 and has since grown to 24 stores and 14 shop-in-shops in North America. The brand focuses on partnership with artisan candy makers around the globe. More than three quarters of Sugarfina candies are exclusive and can't be found at any other candy store. After posting nearly $25 million in revenue in 2016, Sugarfina is on track to double its revenue in 2017.
"Great Hill is a fantastic partner that deeply understands our customer and how she shops," said Sugarfina co-founders Rosie O'Neill and Josh Resnick. "We are confident that together we will continue to grow the brand and connect with our customers across the globe."
Great Hill Partners' managing partner Michael Kumin and partner Peter Garran will join the Sugarfina board of directors.
"Sugarfina is a proven disruptor in a huge industry that hasn't seen a lot of innovation," said Garran. "While many established brands are struggling in today's retail environment, Sugarfina is thriving due to their innovative products, distinctive branding, and unique, experiential approach to luxury confections."
Costco strong in July
Costco Wholesale Corp. turned in a winning performance in July, fueled by strong traffic trends.
The company reported that its net sales in July rose 8.8% to $9.41 billion, compared to $8.65 billion during the similar period last year. Total company same-store sales rose 6.2%, with a 6.0% increase in the U.S. Excluding the impacts from changes in gasoline prices and foreign exchange, total same-store sales rose 5.3%, and 5.5% in the U.S.
For the 48 weeks ended July 30, Costco reported net sales of $113.70 billion, an increase of 6.1% from $107.16 billion during the similar period last year.
Costco currently operates 736 warehouses, including 511 in the United States and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain, one in Iceland and one in France. Costco also operates electronic commerce websites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.