It was a busy week in retail earnings.
Skechers, VF Corp., Deckers, Boot Barn and Columbia Sportswear all reported results for the most recent quarters this week, kicking off another season of retail earnings.
While results varied for each company, certain themes were pervasive across the board. Here’s what stood out:
Store growth
This earnings season demonstrates the lasting strength of brick-and-mortar retail. Boot Barn president and CEO Jim Conroy said that the company’s strong top-line performance was “driven by new store expansion.” In Q2, the retailer reported a same store sales increase of 2.3% compared to last year. The company’s revenue increase was also bolstered by sales from new stores that opened over the last 12 months.
In its most recent quarter, Skechers noted that it opened 76 company-owned Skechers stores, including 46 in China, 8 big box stores in the United States, a flagship store in Madrid and its first store in Rotterdam.
Watch on FN
VF Corp. is also embarking on a store expansion plan for The North Face, and the company plans to open 300 retail and partner store locations across the world over the next five years. The brand also plans to revamp existing stores in its fleet.
Inventory pileup
Inventories are still high across major retailers and brands this quarter.
VF downgraded its full year outlook, in part due to higher-than-usual inventory levels and more promotional activity in the marketplace. VF said its inventories were up 88% compared with Q2 last year, partially due to in-transit inventory worth about $510 million that VF decided to take ownership of from the point of shipment rather than destination.
For Skechers, inventory was up 45% to $1.78 billion in its most recent quarter.
“We are optimistic that inventories will gradually return to normalized levels as supply chain volatility diminishes,” said Skechers CFO John Vandemore.
Deckers’ inventory was $925 million, up 45% compared to the prior year. And Columbia Sportswear’s inventories were up 47%.
Strength in Outdoor
The pandemic-fueled outdoor boom isn’t slowing down — and companies in the space are benefiting.
For example, Columbia Sportswear’s Columbia brand grew 19% in Q3.
“The brand’s iconic innovation, value proposition and democratic distribution, uniquely position the brand to capitalize on the popularity of outdoor activities,” said Columbia chairman, CEO and president Timothy Boyle, of the brand’s success in Q3.
As one of the biggest growth drivers for VF, The North Face also benefited as a leader in the outdoor market.
“Our purpose-built portfolio of iconic and deeply loved brands continues to benefit from strong tailwinds in the outdoor, workwear, streetwear and active spaces,” said VF Corp. chairman, president and CEO Steve Rendle.
Other emerging outdoor brands at VF grew by 14% in Q2.
