Arkansas-based Dillard’s, Toronto-based Hudson’s Bay Company, Wisconsin-based retailer Kohl’s and Seattle-based Nordstrom have reported financial results for the period ended July 30, 2016.
Nordstrom, which only announced its second quarter results, reported earnings per diluted share of $0.67 for the second quarter ended July 30, 2016. Second quarter net earnings were $117 million, a sharp drop from $211 million the year before. Nonetheless, company officials said the earnings were above the company’s expectations.
Total company net sales of $3.6 billion for the second quarter, a minor 0.2 percent decrease compared with net sales the same period in fiscal 2015. However, comparable sales for the second quarter decreased 1.2 percent year over year. The Nordstrom Rack brand had an increase in net sales of 11.2 percent and comparable sales increased 5.3 percent. The East was the top-performing geographic region for this sector. Across U.S. full-line stores and Nordstrom.com, the Midwest was the top-performing geographic region.
“Over the past several quarters, our team has been actively addressing our inventory, expense and capital, and in the second quarter, made substantial progress by bringing down inventory in-line with sales,” said Blake Nordstrom, co-president, Nordstrom, Inc. “Those efforts, along with the strength of our Anniversary Sale and a great response from customers to that event, drove better than expected results for the second quarter.”
Over at Hudson’s Bay Company, consolidated comparable sales increased by 1.9 percent, but on a constant currency basis, consolidated comparable sales decreased 1.3 percent. Within the company, Saks Fifth Avenue comparable sales decreased 1.3 percent and HBC Off Price (Saks OFF 5TH and Gilt) comparable sales decreased by 11.4 percent, cycling against an increase of 12.7 percent reported in the prior year.
“During the second quarter, we continued to innovate and to execute our strategy, which we believe differentiates us from other retailers,” said Jerry Storch, chief executive officer, HBC. “Our results reflect our diversification across both geography and retail concepts. Saks Fifth Avenue improved considerably despite the continued decline in tourism. At Saks OFF 5TH, as discussed last quarter, we significantly reduced promotional activity compared to the prior year, which has increased margins substantially while reducing sales. In addition, at Gilt, which is included in the HBC Off Price business and is a major component of our digital comparisons, we enhanced the return policy. As we look to the second half of the year, we expect the execution of our all-channel strategy combined with overall improvements in the retail environment to drive comparable sales growth.”
At Kohl’s, half-year diluted earnings per share were down 33 percent from 2015, although second quarter earnings were actually up 17 percent. Net income was done a whopping 39 percent for the half-year, although second-quarter earnings rose 8 percent.
Sales were done in both periods: a 2.8 percent for the first half of the year, and 2 percent loss in the second quarter. Comparable store sales also declined both times, with a 2.8 percent loss for the first half of the year, and 1.8 percent loss for the second quarter.
“Our sales improved over our first quarter results, but were below our expectations. We are encouraged by the performance of juniors and young men’s as we enter the Back-to-School season,” said Kevin Mansell, Kohl’s chairman, chief executive officer and president. “Our inventory management initiatives helped us to achieve a strong increase in gross margin with ending inventory per store down significantly from last year. Our associates throughout the organization continue to effectively manage expenses in response to changing sales trends and I appreciate all of their efforts.”
Meanwhile, Dillard’s reported net income for the 13 weeks ended July 30, 2016 of $12.1 million, or $0.35 per share, compared to net income of $29.9 million, or $0.75 per share, for the prior year second quarter. Net sales for the 13 weeks ended July 30, 2016 and the 13 weeks ended August 1, 2015 were $1.452 billion and $1.514 billion, respectively.
The retailer reported net income for the 26 weeks ended July 30, 2016 of $89.5 million, or $2.55 per share, compared to net income of $139.5 million, or $3.43 per share, for the prior year 26-week period. Net sales for the 26 weeks ended July 30, 2016 and the 26 weeks ended August 1, 2015 were $2.956 billion and $3.087 billion, respectively.
Although all sales categories declined, stronger performing categories were ladies’ apparel and men’s apparel and accessories. Sales of home and furniture were significantly weaker. Sales trends were strongest in the Eastern region, followed by the Western and Central regions, respectively.
Dillard’s chief executive officer, William T. Dillard, II, said: “The challenges facing apparel retailers continued through the second quarter, and our poor results reflect this. In spite of weak sales, we returned $57 million to shareholders through stock repurchase and dividends. While we continue to deal with weakness in the fashion retail industry, we believe we are in good financial shape for the long term.”