The latest first-quarter filings from US apparel and footwear brands and retailers show some companies are beginning to recover from the market disruption caused by the Covid-19 pandemic. However, figures are mostly in comparison to the period when the market began to first feel the impact of the global coronavirus pandemic when stores began to close or reduce their opening hours.
Kontoor Brands
Kontoor Brands CEO Scott Baxter said the company started 2021 with solid momentum as first-quarter results came in above expectations. For the three months to 3 April, revenue increased 29% to US$652m on a reported basis and 27% in constant currency over the same period in the prior year. US revenue was up 29% to $488m, while international revenue was $163 million, a 30% on a reported basis and 21% in constant currency. Improvement was driven by the China business that surged 109% in constant currency and 20% in constant currency. Despite ongoing headwinds from Covid-19, the Europe business, led by digital, increased 4% on a reported basis and was down 5% in constant currency. Wrangler brand global revenue amounted to $399m, a 31% rise on a reported basis and 30% in constant currency, while Lee brand global revenue increased to $250m, a 37% rise on a reported basis and 33% in constant currency. Net income, meanwhile, amounted to $64.46m, compared to a net loss of $2.71m last time. Gross margin increased 830 basis points to 46.1%.
Under Armour
US sportswear retailer Under Armour saw revenue rise 35% in the first quarter ended 31 March to US$1.3bn compared to the prior year. Wholesale revenue increased 35% to $800m, while direct-to-consumer revenue surged 54% to $437m, driven by 69% growth in e-commerce. North America revenue jumped 32% to $806m, while international revenue increased 58% to $452m. Within the international business, revenue increased 41% in EMEA and by 120% in Asia-Pacific, but decreased 9% in Latin America. Apparel revenue, meanwhile, was up 35% to $810m, while footwear revenue increased 47% to $309m. Accessories revenue was up 73% to $117m. Net income, meanwhile, amounted to $77.8m, compared with a net loss of $589.7m a year earlier. Adjusted net income for the quarter was $75m. Gross margin increased 370 basis points to 50% compared to the prior year, driven primarily by benefits from pricing, supply chain initiatives, and channel mix.
Rocky Brands
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By GlobalDataRocky Brands CEO Jason Brooks hailed an “excellent” start to the year as net sales for the first quarter ended 31 March increased 57.3% to US$87.7m. First-quarter 2021 net sales include $6.5m in net sales from the performance and lifestyle footwear business acquired from Honeywell International, Inc. Net income for the period amounted to $4.5m, compared to $1.2m last time. Adjusted net income was $8.7m, compared to $2m in the first quarter of 2020. Gross margin expanded to 40.1% from 34.7%.
Weyco
Footwear maker Weyco has reported net earnings of US$1.3m for the first quarter ended 31 March, compared to $1.2m in the prior-year period. Net sales fell to $46.9m from $63.6m last time. Net sales in the North American retail segment were $5.6m compared to $4.8m in last year’s first quarter. Same-store sales were up 32% for the quarter due to a 36% increase in e-commerce sales, mainly BOGS, offset by a 5% decline in brick-and-mortar same-store sales.
Carter’s
Carter’s CEO Michael Casey said the company’s first-quarter sales and earnings meaningfully exceeded expectations, with growth in each of its retail, wholesale, and international business segments. Net sales increased US$132.9m, or 20.3%, to $787.4m for the quarter ended 3 April, with US retail, US wholesale, and international segments growing 27%, 12%, and 19%, respectively. US e-commerce net sales were up 38%. Consolidated net sales in fiscal March increased 59% compared to the prior-year period. Net income increased $164.9m to $86.2m, compared to a net loss of $78.7m in the first quarter of fiscal 2020. Adjusted net income amounted to $87m, compared to a net loss of $34.8m last time.
For fiscal 2021, the company projects net sales will increase about 10%, with adjusted diluted earnings per share up by about 40% compared to $4.16 in fiscal 2020.
Columbia Sportswear Company
Columbia Sportswear’s net sales increased 10% to US$625.6m for the quarter ended 31 March, compared to $568.2m in the prior-year period. Business momentum was led by direct-to-consumer 0DTC) e-commerce net sales growth of 35%, as well as better than planned sequential improvement in DTC brick and mortar trends. Net income, meanwhile, amounted to $55.9m compared to $0.2m last time, while gross margin expanded 360 basis points to 51.4% from 47.8% for the comparable period in 2020. Gross margin expansion was primarily driven by decreased reserve provisions related to less excess inventory, lower DTC promotional levels, and favourable channel and region sales mix.
For the full year, Columbia Sportswear expects net sales of $3.04-$3.08bn, representing net sales growth of 21.5-23% compared to 2020. Net income is expected to be $271-$288m, resulting in diluted earnings per share of $4.05 to $4.30.
Steven Madden
Steve Madden saw first-quarter revenue increase by 0.5% to US$361m from $359.2m in the same period of 2020. Revenue for the wholesale business declined 3.7% to $291.4m, while retail revenue was $67.5m, a 27.5% increase compared to last year, driven by strong performance in the e-commerce business. Net income attributable to Steven Madden, Ltd was $21.2m, compared to a net loss of $17.5m last time. Adjusted net income was $26.9m, compared to $13m. Gross margin increased 130 basis points to 38.5% from 37.2% a year prior.
Crocs
CEO Andrew Rees said demand for the Crocs brand is stronger than ever with expected 2021 revenue growth of 40-50%. “In the first quarter we achieved record revenues and profitability, with growth in all regions and all channels. We have raised full year guidance as we continue to see consumer demand for our product accelerate globally,” Rees noted. The footwear firm booked record first-quarter revenues for the three months ended 31 March of US$460.1m. This was up 63.6% on last year, or 60.5% on a constant currency basis, with growth in all regions and channels. Digital sales grew 75.3% to represent 32.3% of revenue versus 30.1% last year. Direct-to-consumer grew 93.3% and wholesale revenues by 50.1%. Geographically, Americas revenues of $276.4m surged 87.5% on a constant currency basis, while those for Asia Pacific were up 20.1% to $82.6m. EMEA revenues of $101.1m increased 41%. Net income, meanwhile, amounted to $98.4m, compared to $11.09m a year earlier. Gross margin of 55% increased 730 basis points from 47.7% in the same period last year. Adjusted gross margin of 55.2% rose 720 basis points.
Skechers USA
Footwear retailer Skechers USA has reported sales of US$1.43bn for the first quarter ended 31 March, an increase of 15% and a quarterly record. The rise was a result of a 20.2% increase in international sales and an 8.5% hike in domestic sales. Increases in international sales were driven by wholesale, while domestic sales were driven by direct-to-consumer, including e-commerce growth of 143%, partially offset by a slight decline in wholesale. On a constant currency basis, the company’s total sales increased 11.7%. Net earnings were $98.6m, compared to $49.1m last year. Gross margin increased 350 basis points to 47.6% as a result of increased margins in both the international wholesale and direct-to-consumer segments. The strong margin performance was driven by an increase in selling price across all channels and a favourable mix of e-commerce sales.
Levi Strauss & Co
Jeans giant Levi Strauss & Co has raised its guidance for the first six months after making a strong start to the year and beating internal expectations for the first quarter. For the three months ended 28 February, the denim specialist reported a 13% decline in net revenues to US$1.31bn on a reported and 16% on a constant-currency basis from $1.51bn last time. Geographically, net revenues in the Americas declined 14% on a reported basis to $641m, while those in Europe were down 16% to $429m. In Asia, net revenues fell 5% on a reported basis to $235m. Net income, meanwhile, dropped 6.5% to $143m from $153m in the same quarter of the prior year, due to higher interest expense and the adverse revenue impact of Covid-19. Adjusted net income was $140m, as compared to $162m last time. Reported gross margin increased 250 basis points to 58.2%, a record high for the company.
Looking ahead, the company has raised its fiscal first-half 2021 reported net revenues outlook to 24-25% growth compared to the first half of 2020 and raised its first-half adjusted EPS estimate to $0.41-$0.42.
