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Earnings Roundup: Profits, Sales Rise at Burlington; Activewear Leads Sequential Brands; Stage Stores Suffer Losses

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Burlington

With the latest batch of results, each segment performed predictably: off-price wins, activewear performs and department stores sag.

Sequential Brands

Sequential Brands Group, which owns, market and licenses Joe’s Jeans, Jessica Simpson, William Rast and Avia, among others, issued its full year and fourth quarter results for 2016, ended Dec. 31, 2016.

Revenue spiked at $45.4 million, a 44 percent increase compared to $31.4 million in the third quarter. Income reached $23.1 million, compared to $3.4 in the same period of 2015. Net loss was $1 million or 2 cents per share, up from a $5.7 million loss, or 12 cents per share.

“2016 was a productive year for Sequential led by positive organic growth, the completion of the integration of the Martha Stewart and Chef Emeril Lagasse brands and acquisition of the GAIAM yoga and wellness business,” said Sequential Brands Group CEO Yehuda Shmidman, in a statement. “Looking ahead, despite a challenging macro retail environment, we will remain focused on growing our core business and maximizing operating efficiencies, inclusive of new revenue initiatives already underway.”

Revenue for the year reached $155.5 million, up 76 percent over last year. Income increased to $70.1 million compared to $29.7 million. Net loss was $800,000 or 1 cent per share, compared to a $2.9 million loss and 7 cents per share in 2015.

The company’s strongest performers were in activewear, compared to the relatively soft fashion business. As with most apparel businesses, it was plagued by the shift from stores to online.

The company has lowered its guidance to $170 million to $175 million for 2017. It expects net income of $19.3 to $21.9 million.

Burlington

Off-price retailer Burlington reported net sales of $1.7 billion, a 9.4% increase, for the quarter ended Jan. 28, 2017. Comp stores grew by 4.6%.

Though sourcing costs increased in the quarter, they were offset by an 80 basis points increase in gross margin.

Net income was up 27.1% to $125.6 million or $1.77 per share.

Tom Kingsbury, chief executive officer said, “We are very pleased that we ended the year on a high note, continuing our favorable momentum from the first three quarters of 2016. For the year, we delivered 9.2% total sales growth, a 100 basis point expansion in Adjusted EBITDA margin rate, and a 40 percent increase in adjusted net income per share. In addition, we ended the year with reductions in both comparable store and aged inventories.”

For the year, net sales increased by 9.2% to $5.6 billion, again on the strength of comp stores sales, which increased 4.5%.

Net income surged by 43.5% to $215.9 million or $3.01 per share.

The company’s outlook for the full fiscal year 2017 includes a net sales increase from 7.5% to 8.5%. Comp stores are predicted to increase 2 percent to 3 percent above the 2016 increase. The net income per share guidance is in the range of $3.77 to $3.87.

Stage Stores

Stage Stores, which includes Bealls, Peebles and Stage, reported an 8.5% drop in comp sales while total sales decreased by 9.6% to $454.4 million for the quarter ended Jan. 28, 2017.

The company reported a net loss of $6.8 million or 25 cents per share, compared to net income of $21 million or 71 cents per share in the same period last year.

“Our fourth quarter adjusted earnings reflect continued challenges in our oil impacted and border states, as well as the overall soft retail environment,” Michael Glazer, president and chief executive officer, said in a statement. “Weak traffic led to heightened promotional activity and gross margin pressure in the quarter, yet we are pleased to end 2016 with inventory levels that are 6 percent lower than last year. In addition, our direct-to-consumer business grew at a double digit rate as we enhanced our customers’ online experience.”

For the full year, comp stores decreased by 8.8%. Total sales fell by 10.1% to $1.4 billion. Net loss was $37.9 million or $1.4 per diluted share, versus net income of $3.8 million for 2015.

The company closed 37 stores in 2016.

Stage Stores reported a guidance of $1.3 billion to $1.4 billion for 2017 on negative comp sales in the range of 4 percent to 8 percent.

“We will take steps to drive improved performance by focusing on sales in key merchandise categories, creating an exceptional customer experience in our stores and online, and raising the level of engagement with customers through our marketing,” Glazer said of 2017.

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