The retail environment hasn’t been kind to brands in the first quarter and previous fiscal year. Sears, Tailored Brands and Hugo Boss all reported unfavorable financial results, albeit some more dismal than others.
Sears lost another $607 million in the fourth quarter ended Jan. 28, deepening its loss over the $580 million from the prior year period.
Revenues were down more than 16% to $6.1 billion, according to a report out on Thursday, which Sears attributed to store closures. Comparable store sales were down 10.3%, which the company also blamed on store closures. Sales at Sears were down the most at 12.3% thanks to declines in home appliances, apparel, consumer electronics and tools—essentially all of its key categories.
Looking at the full year, revenues were down nearly 12% to $22.1 billion, and comparable sales were down 7.4% (down 9.3% at Sears and 5.3% at Kmart). The company had a little more cash on hand and a little less inventory than the same time last year. Total long-term debt amounted to $4.2 billion, just about double the $2.2 billion last year in January.
Reiterating its restructuring plans, Sears said it will continue to consolidate Sears and Kmart corporate functions; transition to an integrated value chain model to drive efficiency in pricing, sourcing and supply chain management; optimize its product assortment for Sears and Kmart stores; and continue tapping into its real estate portfolio to identify additional ways to reconfigure things and reduce capital obligations.
“We delivered significant Adjusted EBITDA improvement in the fourth quarter, reflecting our firm focus on profitability to offset ongoing revenue pressures,” Sears Holdings chairman and CEO Edward Lampert said. “Building on this positive momentum, we are taking decisive actions to become a more agile and competitive retailer with a clear path toward profitability.”
Tailored Brands, parent company of brands including Men’s Wearhouse, Jos. A. Bank and Joseph Abboud, comparable store sales across all segments were down 3.2%.
At Men’s Wearhouse, comp sales were down 2.2% due to average transactions per store and promotions bringing down the selling price. Sales at Jos. A. Bank were down 3.6%, primarily for the same reasons.
Net losses in the fourth quarter totaled $30.1 million compared to $1.05 billion the prior year quarter.
As part of its store rationalization program, Tailored Brands closed 233 stores in fiscal 2016, saved more than $60 million in cost savings as part of its profit improvement plan and started to turn the struggling Jos. A. Bank around.
This year, the company still expects sales to be down in low single digits at Men’s Wearhouse, and down mid-single digits for Jos. A. Bank, Moores and K&G Fashion Superstore.
“Unfortunately, the challenging retail environment resulted in soft traffic across our retail brands, which drove lower than expected fourth quarter and full year net sales and gross margins,” Tailored Brands president and CEO Doug Ewert said in the report released Wednesday. “Our 2017 plan includes reinvestment of some of the cost savings we achieved to support our omnichannel strategies. The demand for convenience, a more personalized experience and casual wardrobe options has never been more pronounced. In response, we are accelerating our efforts to translate our high-service, in-store experience online and to drive additional traffic to our stores.”
Hugo Boss remains in the midst of a realignment, and the company’s CEO says it’s starting to take effect. For Hugo Boss, 2017 will be a year of stabilization.
Sales for the fiscal year 2016 were down 4% to 2.69 billion euro ($2.85 billion). In the Americas, sales dipped the most at 12%—as Hugo Boss restricted the distribution of its brands in the wholesale arena—while sales in Europe were up 1 percent.
Earnings before interest, tax, depreciation and amortization (EBITDA) declined 17% during the year to 493 million euro ($522 million), and net income fell 39% to 194 million euro ($205.4 million).
“2016 was not an easy year for Hugo Boss. However, we reacted quickly and consistently to the changes in our environment and introduced a set of measures to put us back on the right track,” company CEO Mark Langer said in a report out Thursday. “We are adjusting our business model to changes in customer behavior. With the clear alignment of our brand portfolio into BOSS and HUGO we will be able to make better use of our strengths in the upper premium segment. I am very confident that Hugo Boss will return to sustainable and profitable growth after this phase of stabilization.”
Looking ahead, Hugo Boss said it expects sales to be stable in 2017 and that things will improve in the U.S. market, though sales will still be down because of the distribution changes in wholesale.