Sporting Goods Retailers Post Strong Q2 Results as Apparel Struggles – Footwear News

It’s been a big week for retail earnings.

Caleres, Shoe Carnival, Dick’s Sporting Goods, Hibbett, Macy’s, Nordstrom and Gap Inc. all released results for the most recent quarter. In some cases, companies showed weak sales due to slowing demand in non-discretionary categories amid a hyper-inflationary environment.

However, some retailers stood out with stronger than expected results despite the economic headwinds.

Here are our top three takeaways from this week’s reports:

momentum for sporting goods

So far in the second quarter, sporting goods retailers appear to have bucked the trend of weak sales as demand slows.

Dick’s Sporting Goods on Tuesday raised its guidance for 2022 after releasing second-quarter results that beat analysts’ expectations. CEO Lauren Hobart said demand trends have remained relatively stable across all income demographics. Dick’s also said it avoids the labor and staffing shortages that have permeated the broader retail industry.

“We don’t see a meaningful decline in trade,” Dick CEO Lauren Hobart said Tuesday in a call to investors. “Our consumer is holding up very well.”

Hibbett Sports executives also said on Thursday the retailer has largely managed to avoid the problem of consumers switching to cheaper alternatives. Hibbett also sees benefits in his strategy of focusing on opening stores in “underserved markets” where there is less competition between similar retailers.

Both companies highlighted their strong product range, which includes Nike high-heat products.

weakness in clothing

Retailers specializing in the sale of apparel lowered their forecasts following the release of second-quarter results as consumers shifted spending away from non-discretionary categories.

Despite beating earnings expectations in the second quarter, Macy’s lowered its full-year guidance citing inflationary pressures.

Macy’s CFO Adrian Mitchell said the retailer saw a decline in retail traffic in areas with flagging apparel sales during the quarter as consumers faced higher costs for essential goods, particularly groceries. Pandemic-related categories, which include active, casual, sportswear, sleepwear and soft home, also continued to slow in the second quarter.

Nordstrom also lowered its full-year guidance despite performing well in the second quarter.

Gap Inc. on Thursday withdrew its full-year financial outlook, citing macroeconomic headwinds and an ongoing search for a new CEO.

gap inc CFO Katrina O’Connell Speaking to investors on Thursday, said that “signs of weak demand among low-income consumers are making forecasting accuracy increasingly difficult.”

Shoe retailers benefit from Back-to-School

Shoe Carnival and Caleres, owner of Famous Footwear, rose after the two retailers released second-quarter results this week. Both noted the benefit of the pivotal back-to-school season.

Caleres Chair and CEO Diane Sullivan said the company expects “a solid back-to-school season,” noting that consumers appear to have started shopping later than usual for this period.

She added that Caleres’ diverse brand portfolio across different markets makes the company “well positioned” to continue growing despite the current challenges in the macroeconomic environment. Caleres reiterated its full-year 2022 outlook and said it expects earnings per diluted share to be between $4.20 and $4.40, which would mark another record or near-record earnings year.

Shoe Carnival said it has already had strong back-to-school results. In an interview with FN, CEO Mark Worden noted that the company’s market gains on Thursday followed the company reporting the highest three-day sales streak in its history during back-to-school this month.

Shoe Carnival reiterated its earnings guidance and expects earnings per share of between $3.95 and $4.15 for fiscal 2022.

Leave a Reply

Your email address will not be published. Required fields are marked *