Another big earnings week for the retail sector is fast approaching.
Major fashion and footwear players from Crocs to TJX Companies are set to report fourth-quarter and full-year results next week. The figures will offer key insights into the performances of some of the industry’s most recognized brands during the all-important holiday shopping season. They could even be a harbinger of things to come in 2021 — that is, factoring in the macroeconomic uncertainties caused by the persistent COVID-19 pandemic.
Here, FN rounds up Wall Street’s predictions for some of the companies soon reporting Q4 results, as well as their performances last quarter and what to watch in the months ahead.
Crocs
Release: Before market open on Tuesday, Feb. 23
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Wall Street forecast: Earnings of 78 cents per share and revenues of $399.51 million
What to watch: Despite challenges brought about by the COVID-19 outbreak, Crocs Inc. has managed to solidify its brand strength — driven by a combination of trend-right products, buzzy collaborations and targeted marketing efforts. Last month, the company announced expectations for fourth-quarter revenues to surge about 55% to between $407 million and $410 million — up from the previous guidance range of 20% to 30% growth. For the 2020 fiscal year, it predicted revenue gains of more than 12%, which is also an improvement from its recent guidance of approximately 5% to 7% growth.
What’s more, the clog maker — named FN’s Brand of the Year at the 2020 FN Achievement Awards — predicted record revenues of between $1.381 billion and $1.384 billion for 2020. It forecasted an accelerated full year 2021 revenue increase of 20% to 25%.
Last quarter: In the third quarter, Crocs recorded adjusted earnings of 94 cents per share, while analysts had bet on earnings of 69 cents. Revenues rose 15.7% to $361.7 million, versus market watchers’ forecasts of $339.6 million. In addition, its digital sales — including those made through company-owned websites, third-party marketplaces and e-tailers — advanced 35.5% for the three-month period.
Macy’s
Release: Before market open on Tuesday, Feb. 23
Wall Street forecast: Earnings of 7 cents per share and revenues of $6.5 billion
What to watch: As part of its turnaround plan unveiled last February, Macy’s Inc. is in the midst of shuttering underperforming locations and consolidating its headquarters in New York City. It continues to make upgrades to its stores through a “growth treatment” that includes physical store improvements and investments in merchandising, technology, talent and local marketing. According to the retailer, it expects its top 250 units to account for 78% of sales by 2021.
Although it did not provide an outlook for the fourth quarter, chairman and CEO Jeff Gennette said in mid-November that “looking to holiday 2020, we know this year is different… We continue to watch the resurgence of COVID-19 and its potential impact on our business. Our teams are executing well and have shown the flexibility and agility to adjust plans and provide a great omnichannel experience to our customers.”
Last quarter: Macy’s logged a loss of 19 cents per share in the third quarter, compared with consensus bets of a loss of 79 cents per share. Revenues fell to $3.99 billion from the prior year’s $5.17 billion, but the figure still topped estimates of $3.86 billion. Comparable store sales dipped 20.2% on an owned and licensed basis, while digital sales improved 27%.
Steve Madden
Release: Before market open on Thursday, Feb. 25
Wall Street forecast: Earnings of 21 cents per share and revenues of $345.7 million
What to watch: In late October, during the company’s third-quarter conference call with analysts, Steven Madden Inc. chairman and CEO Edward Rosenfeld explained that the firm intends to begin moving sourcing out of China once again come spring ’21. (Plans to exit the East Asian country had been halted amid the coronavirus health crisis.) He shared that the percentage range of materials sourced from China are currently in the “low 60s,” compared with nearly 90% just a couple years ago.
The company opted against providing guidance for the upcoming quarter; however, in a statement at the time, Rosenfeld said, “We remain confident that our strong brands, pristine balance sheet and proven business model will enable us to drive sustainable revenue and earnings growth as conditions normalize.”
Last quarter: For the third quarter, Steve Madden logged adjusted earnings of 39 cents per share as well as a 30.9% decline in revenues to $346.9 million. Still, it managed to beat forecasts of 21 cents in earnings per share and revenues of $329.3 million. It added that retail sales dropped 22.1% to $59 million due to a “significant decline” in its brick-and-mortar business, partially offset by “strong growth” in e-commerce.
TJX
Release: Before market open on Wednesday, Feb. 24
Wall Street forecast: Earnings of 61 cents per share and revenues of $11.46 billion
What to watch: Experts have expressed concerns over the performance of the off-price stores in COVID-19 times, considering they often have a limited online presence and near-inability to replicate the “thrill of the hunt” experience via digital channels. However, The TJX Companies Inc. has proven resilient — particularly with HomeGoods. The chain continues to experience a surge in sales as the outbreak keeps people indoors, leading TJX to roll out e-commerce via HomeGoods.com later this year.
“As we begin the fourth quarter, while significant uncertainty around COVID-19 remains, we are as focused as ever on bringing consumers exciting gift selections at excellent values,” president and CEO Ernie Herrman said in mid-November. “We plan to ship fresh assortments to our stores and online throughout the holiday selling season. Longer term, when we are past this health crisis, we are very confident that we will continue to gain more customers and drive the successful growth of TJX well into the future.”
Last quarter: During the third quarter, the TJ Maxx and Marshalls parent recorded earnings of 71 cents per share, compared with analysts’ expectations of earnings of 40 cents per share. Revenues amounted to $10.12 billion — down from the prior year’s $10.45 billion but better than consensus bets of $9.36 billion. Overall, the Framingham, Mass.-based business posted a 5% drop in “open-only” comps, which were defined as the increase or decrease of sales at stores for the days they were open in Q3 2021 against sales for those same days in Q3 2020.
