- Prachi Singh |
Delta Galil reported sales of 371.6 million dollars for the fourth quarter of 2017, compared with 376.3 million dollars for the same quarter last year, representing a 1 percent decrease. Sales for the 2017 full year increased 16 percent to a 1,368.1 million dollars against the previous year. Operating profit was 32.5 million dollars, a 1 percent increase, while operating profit for the year was 84.6 million dollars compared to 85.3 million dollars last year, a decrease of 1 percent.
Commenting on the company’s results, Isaac Dabah, CEO of Delta Galil, stated in a press release: ““Our recently acquired Delta Galil Premium Brands (DGPB) segment, continued to be a strong contributor to sales throughout 2017, and remains an exciting growth opportunity looking ahead. We have several strategic initiatives and category expansions in place for 2018 that are intended to maximize growth opportunities within that segment.”
Q4 net income rises 8 percent
Net income increased 8 percent to 20.1 million dollars in the fourth quarter and excluding one-time items net of tax increased 7 percent for the full year and amounted to 50.7 million dollars. Net income for the 2017 full year was 49 million dollars, compared to 51.9 million dollars last year, representing a 6 percent decrease.
Diluted earnings per share increased 7 percent in the fourth quarter to 0.79 dollar and excluding one-time items increased 7 percent and amounted to 1.98 dollars for the full year. For the full year, diluted earnings per share amounted to 1.91 dollars, compared to 2.03 dollars in 2016, a 6 percent decrease. EBITDA was 40 million dollars or 10.8 percent of sales in the fourth quarter, while for the full year, EBITDA was 115.9 million dollars or 8.5 percent of sales.
Delta Galil declared a dividend of 3.5 million dollars or 0.139 dollar per share, to be distributed on March 13, 2018.
Delta Galil expects FY18 sales to rise 2-5 percent
Delta Galil has provided its initial 2018 financial guidance, excluding one-time items, which is based on current market conditions. Full-year sales are expected to range between 1,400 million-1,440 million dollars, representing an increase of 2 percent-5 percent from 2017 actual sales of 1,368.1 million dollars.
Full-year 2018 EBIT is expected to range between 91 million dollars-96 million dollars, representing an increase of 4 percent-10 percent and EBITDA is expected to range between 119 million dollars-125 million dollars, representing an increase of 3 percent-8 percent. The company expects net income to range between 54 million dollars-59 million dollars, representing an increase of 7 percent-16 percent from 2017 actual net income of 50.7 million dollars and diluted EPS is expected to range between 2.11 dollars-2.30 dollars, representing an increase of 7 percent-16 percent.
- Vivian Hendriksz |
London - High street fashion retailers H&M and C&A have launched internal investigations after a report from the Financial Times alleged inmates from a Chinese prison made the packaging they use.
Peter Humphrey, a British corporate investigator, and former journalist is said to have spent 23 months in prison in China after being found guilty of selling illegally acquired private data from Chinese citizens to external clients, charges which he has denied. In the report, Humphrey claims part of the work prisoners included making packing parts for fashion retailers. "Our men made packaging parts. I recognized well-known brands - 3M, C&A, H&M," wrote Humphrey.
Although the article also added that the prisoners made textiles and other components, it did not clarify for which brands they were for. Humphrey noted that the companies they produced for may not have known prison labour was being used to make the products.
H&M said they were looking into the allegations as well, but have not been able to confirm or deny them. "It is completely unacceptable placing manufacturing into prisons and it seriously violates our Sustainability Commitment that our suppliers must follow," said an H&M spokesperson in a statement. "Since it is a non-negotiable requirement, a failure to comply would immediately lead to permanent termination of our business contract. We are aware of the claims and we take it very seriously. At this point we can't confirm whether they are accurate or not. As part of our investigation, we are currently looking for further and more detailed information together with our China based team, as well as reaching out to Chinese suppliers."
C&A's chief sustainability officer, Jeffrey Hogue, said the fashion retailer takes the allegations made in the report extremely seriously and was investigating. "We have a zero tolerance policy for any form of modern slavery including forced, bonded or prison labour. If we detect a case, we immediately terminate our relationship with the supplier," Hogue said in a statement to Reuters.
Over the recent years more and more fashion retailers have been working hard to ensure their supply chains do not include any form of forced labour or migrant trafficking.
Photo: H&M store in Sweden, copyright:Robert Lindholm
- Prachi Singh |
Westfield Corporation has announced its full year results with 13 percent rise in 2017 net profit to 1.55 billion dollars. Revenue rose by 17 percent to 2.1 billion dollars with funds from operations (FFO) for the 12 months ended December 31, 2017 reaching 707 million dollars.
Commenting on the company’s performance, Westfield Corporation Co-CEOs, Peter and Steven Lowy said in a statement: “2017 was a significant year for Westfield with the announcement in December of the proposal to combine Westfield with Unibail-Rodamco to create the world’s best retail real estate platform. In the United States we have added over 130 retailers and brands that are new to Westfield in our recently completed developments.”
The company added that Westfield’s financial position is strong with balance sheet assets of 23.6 billion dollars, a gearing ratio of 38.1 percent and 2.6 billion dollars in available liquidity.
Westfield said that the company remains confident in the future outlook for its business and for 2018, it expects earnings will be positively impacted by the stabilisation of recently completed development projects including Century City and UTC together with the completion of the expansion of Westfield London.
- Prachi Singh |
The Björn Borg AB Group’s net sales fell 0.7 percent to 170.3 million Swedish krona (20.9 million dollars) for the fourth quarter, while net sales for the year ended December 31, 2017 increased 10.3 percent to 696.5 million Swedish krona (85.5 million dollars). Fourth quarter earnings per share before and after dilution amounted to 0.43 Swedish krona (0.05 dollar) against 0.74 Swedish krona (0.09 dollar), same quarter last year, while full year earnings per share before and after dilution amounted to 1.48 Swedish krona (0.18 dollar) compared to 1.88 Swedish krona (0.23 dollar) last year.
Commenting on the company’s results, CEO Henrik Bunge said in a media statement: “The fourth quarter saw a significantly better gross profit margin than the previous year at 58.3 percent. We are increasing our costs, but this is essentially due to our Benelux acquisition.”
Review of Björn Borg’s Q4 and full year results
The gross profit margin for the quarter rose to 58.3 percent against 48 percent, while operating profit amounted to 16.9 million Swedish krona (2.08 million dollars against 21.4 million Swedish krona (2.6 million dollars). Profit after tax amounted to 11 million Swedish krona (1.3 million dollars) in the fourth quarter compared to 17.9 million Swedish krona (2.2 million dollars).
Excluding currency effects, full year sales rose 9.6 percent and the gross profit margin reached 54 percent compared to 50.3 percent last year. Operating profit amounted to 55.4 million Swedish krona (6.8 million dollars) against 64.2 million Swedish krona (7.9 million dollars) and profit after tax amounted to 37.4 million Swedish krona (4.6 million dollars) against 46.9 million Swedish krona (5.7 million dollars).
Brand sales for the quarter dropped 3 percent to 360 million Swedish krona (44.2 million dollars) and for the full year, sales fell marginally to 1,542 million Swedish krona (189.5 million dollars) from 1,551 million Swedish krona (190.7 million dollars) last year. Excluding currency effects, brands sales were down 2 percent. Brands sales in the underwear product area were down 4 percent, while sports apparel grew 9 percent during the year and footwear 7 percent against 2016.
Among large markets, the company said, Finland posted growth while Sweden grew slightly against last year, while other large markets witnessed a fall in sales due to poor performance of the underwear category. The company’s smaller markets England and Germany, however saw improvement in sales. The company opened one store in Finland in the third quarter of 2017 and as of December 31, the company operated 41 Björn Borg stores, of which 35 are group-owned against 20 last year. The company said, increased in group-owned stores is because of the acquisition of Benelux, where 13 stores were re-classified as company-owned in the first quarter of FY17.
The board of directors has decided to propose a dividend of 2 Swedish krona (0.25 dollar) per share to the Annual General Meeting, totalling 50.3 million Swedish krona (6.1 million dollars).
Picture:Björn Borg website
- Prachi Singh |
Billabong International Limited reported EBITDA for the six months ended December 31, 2017 was 19.3 million Australian dollars (15 million dollars), compared with 23.9 million Australian dollars (18.6 million dollars) in the prior corresponding period, down 19.1 percent as reported and 15.9 percent in constant currency. Total revenues for the half were 474.5 million Australian dollars (371 million dollars), down 3.1 percent reported and 1.5 percent in constant currency. The company reported a net loss after tax of 18.4 million Australian dollars (14.3 million dollars).
Commenting on the first half results, Billabong Chief Executive Officer Neil Fiske said in a statement: “The results we are reporting today are consistent with the updated guidance given in January – namely that we would be down in the first half, but expect to be up in the second to deliver full year EBITDA of 51.1 to 54 million Australian dollars – at or just above last year. This result and our expectations for the full year reflect the challenge we face in converting our operational improvements into EBITDA growth. The fact that a number of industry participants are currently undergoing a sales process is yet another indication of the tremendous disruption that we are witnessing.”
Billabong’s first half performance across core regions
The Americas, Billabong said, delivered the benefits of change initiatives undertaken in the past four years. EBITDA prior to global allocations was up 34.1 percent to 13.3 million Australian dollars (10.4 million dollars), with total revenue up 3.9 percent. Ecommerce sales grew 19.5 percent, representing 9.6 percent of sales, while brick and mortar comparable store sales were up 0.7 percent on slightly lower margins. Total comparable retail sales, combining comparable stores and ecommerce, were up 5.8 percent and margins were down, by 60bps. The company expects revenue and EBITDA gains in the Americas to level out in the second half as it cycles tougher comparables and operational improvements.
Asia-Pacific (APAC) posted EBITDA prior to global allocations for the region down 9.2 percent in constant currency, a decline of 2.1 million Australian dollars (1.6 million dollars). Total revenues were down 4.5 percent, up 1.3 percent in retail but down 16.6 percent in wholesale reflecting ongoing weak market conditions, but also the lag effect of some assortment and execution issues. Gross margins improved 120bps. APAC brick and mortar retail comps were up 0.9 percent for the half, however, retail conditions remained challenging in Australia, where first half comparable store sales ended down 0.6 percent, but comps during the key December month were up 2 percent in Australia. Ecommerce grew 28.7 percent for the half, 40.2 percent in Australia. Total comparable retail sales for the APAC region were up 1.8 percent for the half and retail margins were up 120bps.
Results in Europe, the company added, were affected by the timing shift in wholesale revenue, and weaker than anticipated retail results. There was a good improvement in margins, and the region is still expected to be ahead in EBITDA for the full year on a relatively flat revenue line. EBITDA prior to global allocations for the first half was down 29.4 percent to 4.9 million Australian dollars (3.8 million dollars), a 2 million Australian dollars (1.5 million dollars) decline on a constant currency basis. Total revenues were down for the region by 6.1 percent in constant currency, while gross margins were up by 100bps. Retail in Europe performed below expectations in the half, with brick and mortar comparables down 2.3 percent. Ecommerce grew 15.1 percent and now represents 5.5 percent of total sales. Total comparable retail sales were down 0.3 percent, but retail margins improved 140bps.
RVCA brand performs well across geographies
The results, the company said, varied among the company’s big three brands of Billabong, RVCA and Element. In wholesale equivalent sales including sales to own retail - Billabong was down 0.5 percent for the half, up in Americas, down in APAC, Element was down 13 percent, impacted by the timing shift in Europe and a change in distribution strategy in Canada and RVCA was up 9.6 percent with growth in every region.
Brand Billabong continued to gain share in the important US specialty channel, strengthening its position as the number one brand within the core market. Element faced a challenging first half in all geographies, but is expected to record modest full year sales growth in Europe, its largest market. RVCA continues to show good share results in its core market in both men’s and women’s categories.
Billabong confirms full year outlook
The company has confirmed the guidance provided in early January that it expects the group’s FY18 EBITDA (excluding significant items) to exceed the prior year, to be in a range between 51.1 million and 54 million Australian dollars (39.9 to 42.2 million dollars), subject to reasonable trading conditions and currency markets remaining relatively stable. The group continues to have a significant bias of second half earnings to the Americas, with a high concentration of sales in the month of June.
On January 5, 2018, the company announced that Boardriders, Inc. will acquire all of the shares in Billabong, other than those already owned by its related entities.
“The first half result we report today and the challenge of the task ahead need to be seen in the context of the proposal from Boardriders, Inc. that is currently before shareholders. The offer of 1 Australian dollar per share represents certainty for shareholders. The Directors unanimously recommend the proposal, with founder Gordon Merchant and a nominee company of cornerstone investor Centerbridge Partners both stating they intend to vote in favour of the scheme, in the absence of a superior proposal,” added Billabong Chairman Ian Pollard.
- Prachi Singh |
After the collapse of Rana Plaza building housing five garment factories in April 2013, that claimed thousands of lives, the event shook the global conscience. The incident raised serious questions about the hazardous and unsafe conditions garment factory workers spend their entire life in, to create clothes for popular western brands. Several steps were taken, holding brands sourcing from such unsafe factories responsible for ensuring safe working condition for the garment workers.
One such measure was ‘Bangladesh Accord on Fire and Building Safety’, an independent, legally binding agreement between brands and trade unions designed to work towards a safe and healthy Bangladeshi readymade garment industry. With just 100 days left before the agreement expires, a statement from Clean Clothes Campaign has urged brands like Marks and Spencer, Next, Sainsbury’s, Metro Group, Abercrombie & Fitch, and Dansk Supermarked, who are still dragging their feet.
Brands urged to sign the 2018 Transition Accord
The global union signatories to the Accord, IndustriAll and UNI, and the four witness signatories, Clean Clothes Campaign, International Labor Rights Forum, Maquila Solidarity Network and Worker Rights Consortium have called upon the garment companies to continue their involvement to create a safe and sustainable garment industry in Bangladesh and to sign its successor, the 2018 Transition Accord.
“Not signing the 2018 Accord means that one hundred days from now workers will be left in unmonitored factories. As a consequence, garment brands will fall short on their due diligence obligations to keep the workers in their supply chain safe,” said Ineke Zeldenrust, international coordinator of Clean Clothes Campaign in a statement.
The 2018 Transition Accord will continue the work of inspecting factories in Bangladesh, identifying safety hazards, and ensuring that they are corrected. As of today, a statement from Clean Clothes Campaign states that 109 garment companies have signed the 2018 Accord, covering more than two million workers. However, many garment companies still to reconfirm their commitment to the safety of the Bangladeshi workers in their supply chain.
According to Jenny Holdcroft, assistant general secretary of IndustriAll, “There is still no credible alternative to the Accord to protect worker safety in Bangladesh. It is simply not an option for brands to go back to the company-led programs that so clearly failed to prevent large-scale factory tragedies before. Signing the 2018 Accord is the only way for companies to meet their due diligence obligations to ensure that Bangladeshi garment workers can work in safe factories.”
The one hundred-day warning is also aimed at encouraging garment companies that are not part of the current Accord, including those who have joined the Alliance for Bangladesh Worker Safety, a corporate-led safety programme, to sign the 2018 Accord.
“The need for safety committees and an ongoing inspection programme will continue because a factory can be safe one day, and then the fire doors are blocked the next. As long as the Bangladeshi government is not yet ready to assume this responsibility, the Accord will continue to provide the training, engineering expertise, and accountability structures necessary to make garment work safer,” added Christy Hoffman, deputy general secretary of UNI global union.
The Bangladesh Accord was initiated in May 2013, in the aftermath of the Rana Plaza building collapse of April 2013, in which 1,134 workers were killed. It was created as a credible system to monitor and remediate factories of signatory brands and to train workers in the field of safety.
Picture:Clean Clothes Campaign website
- Prachi Singh |
Gildan Activewear Inc. reported a sales growth of 11.2 percent in the fourth quarter, driven primarily by 27.6 percent or 22.5 percent organic sales growth in printwear in the quarter, excluding the impact of the American Apparel acquisition early in 2017. Gildan also announced the implementation of an organizational realignment and related executive management changes, 20 percent increase in the amount of its quarterly dividend and the renewal of its normal course issuer bid to repurchase up to 5 percent of its issued and outstanding common shares.
For the year ended December 31, 2017, sales totalled 2.75 billion dollars, up 6.4 percent compared to last year. Adjusted operating margins of 15.4 percent for the full year, was up 60 basis points over last year, diluted EPS of 1.61 dollars and adjusted diluted EPS of 1.72 dollars, rose 14 percent, while adjusted EBITDA of 586.1 million dollars for the year was in line with the company's guidance range of 580-590 million dollars.
Review of Gildan’s fourth quarter
Consolidated net sales of 653.7 million dollars for the fourth quarter of 2017 increased 11.2 percent compared to the corresponding quarter in 2016 and reflected a sales increase of 27.6 percent in the printwear segment, including the impact of the acquisition of American Apparel, partly offset by a decline of 9.2 percent in branded apparel.
Consolidated gross margin in the fourth quarter increased 40 basis points to 27.1 percent. Consolidated operating margin and adjusted operating margin in the fourth quarter were 9.5 percent and 11.2 percent, respectively, down from consolidated operating margin and adjusted operating margin of 11.9 percent in the fourth quarter of 2016. Net earnings for the quarter were 54.9 million dollars or 0.25 dollar per share on a diluted basis for the three months ended December 31, 2017, compared with net earnings of 74.3 million dollars or 0.32 dollar per share for the three months ended January 1, 2017.
Excluding after-tax restructuring and acquisition-related costs of 12.7 million dollars in the fourth quarter and 0.2 million dollars in the same quarter last year, Gildan reported adjusted net earnings of 67.6 million dollars or 0.31 dollar per share on a diluted basis for the fourth quarter of 2017, down from 74.5 million dollars or 0.32 dollar per share in the prior year quarter.
The printwear business delivered strong double-digit sales growth in the fourth quarter of 2017 which contributed to a 10.4 percent increase in printwear sales for the full year. Excluding the impact of the American Apparel acquisition, sales in the quarter increased 22.5 percent organically.
Net sales for the branded apparel segment in the quarter were 238.1 million dollars, down 9.2 percent from 262.1 million dollars in the fourth quarter of 2016, which Gildan said were mainly due to lower unit sales volumes of socks and activewear, unfavourable product mix driven by a lower proportion of sales of higher-priced socks and activewear, and the impact of the planned exit of certain private label programs, partly offset by increased underwear sales and higher net selling prices.
Highlights of full year consolidated results
The company said, consolidated net sales growth for 2017 was in line with the company’s guidance provided on November 2, 2017, as higher than anticipated unit sales volumes of printwear products in the fourth quarter offset lower than expected unit sales volumes in branded apparel. Printwear net sales of 1,822 million were up 170.9 million dollars due to an incremental sales contribution of approximately 94 million dollars from the combined acquisitions of Alstyle and American Apparel. Excluding the impact of acquisitions, organic sales growth for printwear was approximately 5 percent.
Branded apparel net sales of 928.8 million dollars were below the company's projection of low single-digit growth and slightly down from 934 million dollars in the prior year mainly due to lower sock sales and the impact from the planned exit of private label programs.
Net earnings for 2017 were 362.3 million dollars or 1.61 dollars per share on a diluted basis compared to 346.6 million dollars or 1.47 dollars per diluted share for the same period of the prior year. Before reflecting after-tax restructuring and acquisition-related costs in both years, adjusted net earnings were 386.9 million dollars or 1.72 dollars per share, up 8.6 percent and 13.9 percent, respectively.
Gildan consolidates organisational structure, reveals FY18 outlook
Effective January 1, 2018, the company added that Gildan consolidated its organizational structure and implemented executive leadership changes to better leverage its go-to-market strategy across its brand portfolio and to drive greater operational efficiency across the organization. The company combined its printwear and branded apparel businesses into one consolidated divisional operating structure centralizing marketing, merchandising, sales, distribution, and administrative functions. The combined organization will be led by Michael R. Hoffman, President, sales, marketing and distribution, who previously served as president, printwear.
In its guidance for 2018, Gildan is projecting adjusted diluted EPS in the range of 1.80 dollars to 1.90 dollars, which at the mid-point of the guidance range represents growth of approximately 7.5 percent over 2017, on projected net sales growth in the low to mid-single-digit range. Adjusted EBITDA is expected to be in the range of 595 to 620 million dollars.
Net sales growth in 2018 assumes unit volume growth of imprintables in North America and double-digit volume growth in international markets, favourable product mix due to projected continued strong growth of fashion and performance basics from our American Apparel, Anvil, and Comfort Colors brands, as well as from new product introductions, including the Gildan Hammer line within the Gildan fashion basics collection. American Apparel, which was acquired February 8, 2017 is expected to contribute net sales of approximately 100 million dollars in 2018, up from approximately 50 million dollars in 2017.
Adjusted EPS in the first quarter of 2018 is expected to be lower than the record level achieved in the first quarter last year. Sales are also projected to be down slightly year over year as the company works through temporary product availability constraints resulting from production interruptions, which occurred as a result of the election in Honduras.
For 2018, the company is projecting capital expenditures of approximately 125 million dollars primarily for the continued development of the Rio Nance 6 facility in Honduras, investments in existing textile facilities and distribution capabilities, as well as sewing capacity expansion to align to increases in textile capacity.
The company added that its board approved a 20 percent increase in the amount of the current quarterly dividend and has declared a cash dividend of 0.112 dollar per share, payable on April 2, 2018 to shareholders of record on March 8, 2018.
- Prachi Singh |
When we slip into our favourite pair of branded jeans, we hardly ever think about its origin or the impact it must have had on the life of the person who made them. Overconsumption is encouraging more and more brands to bring cheaper collections to the market at an accelerated pace. This, in turn, means garment workers, who are typically female, are faced with longer working hours, low pay, verbal abuse and unsafe working conditions. “Much of the fashion industry is opaque, exploitative and environmentally damaging, and desperately needs a revolutionary change,” argues Fashion Revolution, which has teamed up with Microfinance Opportunities (MFO) and the C&A Foundation to carry out the research project ‘Garment Worker Diaries.'
The year-long research project, which saw researchers visiting 180 female workers in Bangladesh, Cambodia, and India respectively, found that workers in Bangladesh put in 60 hours a week, earning an hourly rate of 28 taka (0.95 dollars) on average. This means that they earn less than the minimum hourly wage 64 percent of the time. The project also found significant evidence that suggested the more they worked the less they earned. Outside of work, men controlled earnings which were spent on basics like food and rent, but rarely used it to improve a household’s quality of life.
Report highlights minimum wage disparity and workers’ struggles
Popular high street brands source their products from factories based in countries like Bangladesh, Pakistan, India, Myanmar, and Cambodia among others. While there have been protests and movements demanding supply chain transparency from these brands, workers who make apparel continue to lead a life full of struggles. For instance, the Bangladeshi women were found to earn the least per hour—about half of what the women in India and Cambodia earn. In the other countries, there was similarly opaque data when it came to base wage rates and overtime pay.
While workers in Bangladesh earn less, workers in Cambodia seek overtime hours to boost their incomes, but in many cases are not paid a legal wage for these hours, according to the report. On average, Cambodian workers work 48 hours a week and earn an hourly rate of 3,500 riels (2.53 dollars). However, despite earning the minimum wage and supplementing their income with overtime hours, most workers face financial strain and at certain times find it difficult to get access to quality food and medical care.
On the other hand, workers in India’s export-oriented factory employees in the southwest of Bangalore usually earn the legal minimum wage or higher and have access to pension and state insurance programmes. On average, they work 46 hours a week and earn an hourly rate of 39.68 rupees (2.27 dollars). But female workers are often exposed to verbal abuse from their supervisors and rely on income from their husbands or other household earners to meet their financial obligations.
Time to raise our voices and extend support
Despite several studies pointing out the everyday struggles that garment workers face in these countries and organizations striving for better workers’ lives, in reality, much work is still needed to be done. The MFO, Fashion Revolution and C&A Foundation state that while findings of projects like ‘The Garment Workers Diaries’ are effective tools for workers, factories, brands, governments to make needed changes and leverage positive movements in target countries as many of them continue to source clothing from factories employing workers who struggle to make ends meet, it should also serve as an opportunity for key global stakeholders to work collaboratively and bring about systemic change in the garment industry.
Positive steps are being taken by companies like Primark, towards becoming more transparent in their supply chain. Earlier this month, after 70,000 consumers signed a petition calling on leading fashion brands including Armani, Urban Outfitters, Forever 21 and Walmart, to publicly share information on their suppliers, Primark published a list of all the suppliers' it sources its clothes from. Through its #GoTransparent campaign, a coalition consisting of Human Rights Watch, Clean Clothes Campaign and the International Labor Rights Forum have been calling for greater transparency from these brands.
In order to raise consumer awareness, a link has been included in the project template which lets consumers call on brands to share the number of workers in their supply chain that are covered by collective bargaining agreements.
Picture credit:Worker Diaries website
- Prachi Singh |
Wolverine Worldwide, Inc. reported revenue of 578.6 million dollars for the fourth quarter, a decrease of 20.7 percent or 7.1 percent after taking into effect the quarterly calendar change. The company said, underlying revenue for the quarter increased 1.7 percent, including nearly 18 percent underlying growth for Merrell. Reported revenue for the full year of 2.35 billion dollars decreased 5.8 percent against the prior year, while underlying revenue grew 0.6 percent.
"I am pleased with our fiscal 2017 financial performance and continued momentum in Q4, but I am especially proud of the major accomplishments achieved by our team over the last two years," said Blake W. Krueger, Wolverine Worldwide's Chairman, Chief Executive Officer and President in a statement.
Fourth quarter and full year highlights
Reported gross margin for the fourth quarter was 38.4 percent, compared to 36.6 percent in the prior year. Adjusted gross margin on a constant currency basis was 38.5 percent compared to 37.1 percent in the prior year, reflecting an improvement of 140 basis points despite a 50 basis point negative mix impact from store closures. Reported operating margin was negative 12.7 percent, compared to 2.1 percent in the prior year and adjusted operating margin on a constant currency basis was 10.7 percent compared to 8.1 percent in the prior year.
For the full year, reported gross margin was 38.9 percent, compared to 38.5 percent in the prior year. Adjusted gross margin on a constant currency basis was 40 percent, compared to 38.8 percent in the prior year, reflecting an improvement of 120 basis points despite a 50 basis point negative mix impact from store closures. Reported operating margin was 1 percent, compared to 6.4 percent in the prior year, while adjusted operating margin on a constant currency basis was 11.2 percent, a 270 basis points increase versus the prior year.
Reported diluted loss per share in the fourth quarter was 0.65 dollar, compared to 0.02 dollar in the prior year. Adjusted diluted earnings per share were 0.41 dollar compared to 0.34 dollar in the prior year, an increase of 20 percent.
Full year adjusted diluted earnings per share were 1.64 dollars, and, on a constant currency basis were 1.71 dollars compared to 1.36 dollars in the prior year, growth of nearly 26 percent. The company closed 215 stores during 2017 leaving 80 go-forward stores in the fleet.
Wolverine Worldwide reveals FY18 outlook
For FY18, the company expects to report revenue in the range of 2.24 billion dollars to 2.32 billion dollars, a reported decline of 1.3 percent and underlying growth of nearly 6 percent at the high-end of the range.
Gross margin expansion is expected in the range of 40 to 80 basis points, despite a negative mix impact of 20 basis points from 2017 store closures, reported operating margin of 11.6 percent and adjusted operating margin of 12 percent, inclusive of incremental investments in the company's ‘Global Growth Agenda’.
Reported diluted earnings per share are expected to be in the range of 1.87 dollars to 1.97 dollars and adjusted diluted earnings per share of 1.95 dollars to 2.05 dollars, an increase of 25 percent at the high-end of the range. Foreign currency is expected have a neutral impact on earnings. The company expects to announce a 33 percent increase in the annual dividend.
- Prachi Singh |
Total sales at John Lewis for the week ending February 18, were down 0.7 percent on the same week last year, however, fashion sales were up 3.3 percent with womenswear sales up 16.6 percent on last year. The company said, sales were also boosted by customers purchasing Valentine's Day gifts like jewellery, perfume and purses.
The Charlotte Tilbury counter, John Lewis added, which opened in its flagship, Oxford Street shop last week also witnessed good sales. This week, a range of dresses, designed by award-winning designer Eudon Choi for the company’s Modern Rarity label, are launched in shops and online.
Electrical and home technology sales were down 1.5 percent, while home sales were down 3.7 percent. However, the company further said that Valentine's Day helped increase sales in gifts, cook and dine where sales were up 3 percent, with gift food up 11.5 percent.
Picture:John Lewis website