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Retailers Are Reporting Holiday Sales and Updating Guidance. Who’s Winning and Who’s Not?

As 2021 kicks off, results from the holiday season set the tone for not only how retailers have recovered from the pandemic, but also where they can be expected to go throughout the next year. In apparel and footwear, there may not have been many notable success stories throughout the holiday period, but the ones who have performed best remained right in the wheelhouse of what consumers want to shop for.

Lululemon Athletica and Crocs have come out of 2020 as winners, with both increasing their holiday quarter guidance, which may not come as a major surprise given the shift in consumer preferences to more casual, comfortable apparel.

On the other end of the spectrum, specialty apparel is still largely barren of any sustained success, with teen retailers such as Zumiez and Tilly’s still trying to bounce back from sluggish back-to-school seasons and Destination XL losing its share of “big and tall” consumers to competitors. Meanwhile, Genesco is following the general trend of footwear in its slow, methodical stabilization from earlier in 2020.

Lululemon Athletica

Lululemon Athletica appears to have done well for itself during the 2020 holiday season, announcing that it now expects revenue and earnings to be at the high end of its prior range of expectations for the fourth quarter of 2020 ending Jan. 31, 2021.

For the period, the company expects net revenue growth to be at the high end of its “mid-to-high teens” expectation. The company also expects the growth rate in adjusted diluted earnings per share to now be at the top of its “mid-single digits” expectation.

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This would be the second time in two months that the athletic apparel and athleisure retailer raised expectations for the fourth quarter. In a December earnings call, chief financial officer Meghan Frank, said that Lululemon expected total sales in the period to increase in the “mid-to-high teens,” up from its initial projection of a “high-single to low-double-digit” jump. She also indicated that the company expected adjusted earnings per share to increase in the “mid-single digit range,” up from the prior expectations of a modest decline.

Crocs

Crocs had itself a banner year in 2020, winning Footwear News’ Brand of the Year in October as shoppers sought out comfort over fashion footwear throughout the pandemic. Afterpay also said Crocs was among the top fashion products its holiday shoppers purchased.

With holiday sales presumably being big for the footwear brand, which is most known for its classic clogs, Crocs is setting a high bar for its fourth-quarter and full-year outlook, raising revenue guidance from a range between 20 percent and 30 percent growth to approximately 55 percent growth. Revenue estimates for the quarter now sit between $407 and $410 million.

Full-year 2020 revenue is now expected to grow over 12 percent—up from its recent guidance of approximately 5 percent to 7 percent growth—which would bring Crocs record annual revenue between $1.381 billion and $1.384 billion for the year.

But that’s not all, with Crocs anticipating high growth throughout the next full year as well. The brand is calling for accelerated full-year 2021 revenue growth of 20 percent to 25 percent over 2020.

“Amidst a global pandemic in 2020, we will deliver the strongest revenue in Crocs’ history,” Andrew Rees, CEO of Crocs, said in a statement. “Our brand momentum is exceptional, and we anticipate another record year in 2021. We remain focused on continuing to deliver sustainable, profitable growth for years to come.”

Genesco

Footwear on the whole still has a way to go before it sees a full rebound from the pandemic, with NPD Group expecting industry sales to finally stabilize and recover through 2021.

Genesco, the owner of footwear retailers including Journeys, Schuh and Johnston & Murphy among others, is starting to see that stabilization amid a slow holiday season, with total sales across divisions decreasing by 8 percent for the quarter-to-date period ended Dec. 26.

The holiday builds on a third quarter that saw a return to profitability and sales losses cut to 11 percent. Mimi E. Vaughn, Genesco’s board chair, president and CEO, said in a statement that the holiday performance was “encouraging” since sales came in above the company’s expectations.

“Overall, our performance this holiday selling season was very encouraging given the backdrop of the Covid-19 pandemic with sales coming in above our expectations.  Journeys once again led the way with strong full-price selling, and we were pleased that Schuh delivered better than expected results especially as the business continues to face significant mandated store closures.  Fiscal January is off to a strong start with comps turning nicely positive, providing us with optimism for a solid finish to Fiscal 2021.”

Tilly’s

Tilly’s saw net sales increase 3.3 percent year over year to $148.7 million for the nine-week 2020 holiday period ended Jan. 2, 2021. The numbers thus far have well outperformed the company’s third quarter, which saw a 9.4 percent sales decrease to $140.3 million off poor back-to-school sales.

Total comparable net sales, including both physical stores and e-commerce sales, increased by 2.7 percent for the 2020 period, outperforming the 2019 holiday decrease of 2 percent. Footwear, women’s and men’s categories kept the teen retailer afloat, partially offset by decreases in boys’, accessories and girls’ merchandise.

Comparable net sales in physical stores decreased by 12.4 percent for the 2020 holiday period compared to a decrease of 2.7 percent during the 2019 holiday period. Store sales decreased across all geographic markets during the holiday, with net sales in physical stores representing 69 percent of total net sales for the 2020 holiday period compared to 80.5 percent of total net sales during the 2019 holiday period.

E-commerce net sales increased by 65.2 percent for the 2020 holiday period compared to an increase of just 1 percent during the 2019 holiday period, now representing 31 percent of total net sales instead of the 19.5 percent last year.

“To end the 2020 holiday period with as much cash as last year at this time is an amazing result after all that has taken place, which speaks to the quality of execution by our entire team, especially with respect to inventory and expense planning and management, during this most unpredictable year,” Ed Thomas, president and CEO of Tilly’s, said in a statement.

Due to the Covid-19 pandemic, Tilly’s won’t guarantee that its financial results through the remainder of the fourth quarter will remain consistent with those of the 2020 holiday period.

Zumiez

Another specialty retailer catering to teen shoppers, Zumiez, saw total sales dip 0.7 percent during its 10-week holiday period, which ended Jan. 9, with the company’s comparable sales increasing 1.7 percent during the stretch. The totals represent a downturn from the 2.6 percent net sales increase at the mall-based to $271 million in the third quarter.

In a statement, Zumiez CEO Rick Brooks said that comparable sales were up 1.3 percent in December and have been up double digits thus far in January, the final month of the company’s fiscal year.

It appears much of the losses that held the company back are taking place overseas, as store closures still significantly impact Europe due to lockdowns. Excluding the impact of foreign currency translation, North America net sales increased 0.1 percent and international net sales decreased 14.2 percent quarter-to-date.

During the holiday, the hardgoods category, which includes the company’s skating, skiing and snowboarding items, provided Zumiez’s largest comparable sales increase followed by accessories. Footwear brought the biggest comparable sales decline, followed by women’s and men’s.

“We continue to be impressed with our team’s ability to perform well under very difficult retail conditions. Similar to the trends we experienced around Black Friday in November, sales in the off-peak weeks in December were very strong, while the usual peak weeks that are heavily reliant on in-store sales were more challenged with less traffic and various Covid-19 restrictions,” said Brooks. “For the 10-week period, our stores were open for approximately 95 percent of the potential operating days with our most significant closures in Europe and Eastern Canada.”

Destination XL

Destination XL Group, Inc., a retailer specializing in big and tall men’s apparel, saw total sales decrease 23.9 percent to $78.4 million in its nine-week holiday sales period ended Jan. 2.

Comparable sales throughout its omnichannel retail business, which includes the DXL Big + Tall retail and outlet stores, the Casual Male XL banner retail and outlet stores and DXL.com, for the same period decreased 24 percent.

The decline came primarily due to a decrease in comparable store sales of 38.1 percent, which was partially offset by an increase in comparable sales from the direct business of 12.7 percent. Destination XL defines direct sales as sales that originate online, whether through its website, at the store level or through a third-party marketplace.

The comparable increase in the direct business is driven by a 28.4 percent increase in sales on DXL.com.

The company actually increased its wholesale sales during the holiday period from $3.4 million to $4 million. Sales from wholesale are not part of the company’s comparable sales calculation.

Based on the holiday sales results and expectations for the remainder of the fourth quarter, Destination XL expects total sales for fiscal 2020 of $317 million to $319 million, with comparable sales in the omnichannel business for the full year to be down 32.6 percent to 32.9 percent.

Harvey Kanter, president and CEO of Destination XL, revealed 2021 expectations as the big and tall retailer hopes it can bounce back. Plans for the year include expected sales of approximately $385 million to $402 million, adjusted EBITDA of approximately $11 million to $18 million and positive free cash flow.

Destination XL has been significantly impacted by the pandemic, with the retailer notifying the Nasdaq in December that it intended to voluntarily delist its common stock. In the current fiscal year, the company eliminated 101 positions from its corporate office, representing 29 percent of its corporate workforce. In addition, since March 2020, the company’s field personnel has been reduced by 1,078 positions or 54 percent of the total field count.

Boot Barn

Unlike the other retailers revealing holiday sales totals, Boot Barn announced preliminary results for its full third quarter, which ended Dec. 26, 2020. The Western-themed retailer, perhaps best known for its cowboy boots, came in with strong results, expecting to report a net sales increase of 6.5 percent to approximately $302.3 million and a same-store sales jump of approximately 4.6 percent.

The same-store sales include an increase in retail store same-store sales of approximately 1.9 percent and an increase in e-commerce sales of approximately 16.3 percent.

Net income per diluted share of approximately $1 based on 29.6 million weighted average diluted shares outstanding, compared to net income per diluted share of approximately 85 cents in the prior-year period.

“We are very pleased with our third quarter performance as results exceeded our expectations across the board,” said Jim Conroy, CEO of Boot Barn in a statement. “The combination of our innovative merchandise strategies, solid supply chain management and disciplined promotional activity fueled strong full-price selling and a meaningful improvement in merchandise margin. These dynamics contributed to higher profitability year-over-year, with EPS growing more than 20 percent when excluding the impact of tax benefits in both years. With the fourth quarter off to a strong start, we believe we are well positioned for a solid finish to the current fiscal year.”

Due to the ongoing uncertainty created by Covid-19, Boot Barn is not providing fourth quarter and fiscal year 2021 guidance at this time.