You will be redirected back to your article in seconds
Skip to main content

Earnings Edit: Uniqlo, Tapestry, Urban and Simon Report

Fashion companies across the board are battling through disruption and looking to get their bottom lines back on track.

Fast-fashion chain Uniqlo on Wednesday blamed supply chain issues for January’s declining sales and same-store results for doors in Japan.

The month’s same-store sales including online fell 7.1 percent year-on-year while total sales, also including online, dropped 6.3 percent, thanks to a “lack of inventory of thermal clothing, insufficient promotion of sales during sales periods, and a delay in the launch of our Spring ranges caused by the late entry of stock,” Uniqlo said.

Four stores were still temporarily closed at month’s end due to Covid protocols, though the company doesn’t include those locations in its reporting.

Since its new fiscal year started on Sept. 1, 2021, Uniqlo has seen sales decline each month, with same-store and online sales tumbling 19.1 percent on store closures and reduced hours. Vietnam’s lengthy Covid outbreak also drove production and shipping delays.

By October, Uniqlo cited unfavorable weather for the month’s same-store and online sales shrinking 4.8 percent. November’s decline was December’s reached 11.1 percent as “[s]ales of cold-weather clothing struggled” again amid warmer-than-usual weather.

While revenue increased in December’s final week, thanks to a drop in temperature and a strong year-end sale, the month’s revenue declined year-on-year, the company said last month.


Meanwhile, Tapestry managed to raise prices at Kate Spade, Coach and Stuart Weitzman, the three accessible luxury labels that power the fashion house.

In reporting second-quarter results for the period ending Jan. 1, the New York company said digital sales jumped 30 percent while net rose 27 percent to $2.14 billion from $1.69 billion a year ago, or 18 percent on a two-year, pre-Covid basis. Inventory reached $750 million from $632 million a year ago. Freight costs eroded gross margins to 68.1 percent from 69.6 percent a year ago.

Related Stories

Net income rose 2 percent to $317.9 million, or $1.15 a diluted share, from $311.0 million, or $1.11, in the year-ago quarter. On an adjusted basis, earnings per diluted share (EPS) was $1.33.

Wall Street expected adjusted diluted EPS of $1.18 on revenue of $2 billion.

The company projects Fiscal 2022 revenue of $6.75 billion, up from prior guidance of $6.6 billion. For the year, EPS is expected in the range of $3.60 to $3.65, up from prior guidance of $3.45 to $3.50.

Coach's pricing power helped Tapestry offset inflationary cost pressures, while strong consumer demand across brands continued into Q3.
Jennifer Lopez has been the global brand ambassador for the Coach brand since November 2019. Courtesy Photo

Urban Outfitters Inc.

For the quarter ended Jan. 31, the owner of Anthropologie, BHLDN, Free People, FP Movement, Terrain, Urban Outfitters and Nuuly saw net sales of $1.33 billion—$200 million more than the previous, record-setting three months ended Oct. 31, 2021, and $250 million more than Q4 of fiscal 2021, ending Jan. 31, 2020.

Like its peers, Urban Outfitters Inc. voiced concerns that rising freight costs could reduce its margins. Foot traffic, meanwhile, remains a challenge. Though comp sales grew 14 percent over 2020, store sales slumped by low-double-digits on floundering footfall. Free People’s fourth-quarter comp net sales jumped 49 percent over 2020, while Anthropologie’s were up 14 percent and the Urban Outfitters brand rose 3 percent. Total retail net sales improved 15 percent while wholesale net sales fell 22 percent on Free People’s pullback in the channel.

Free People opened 29 new stores in 2021 and closed five, while Anthropologie opened nine and closed eight, and Urban Outfitters opened 17 and shut three.

For the year ended Jan. 31, the company’s total net sales increased 14.2 percent from the same period in 2020. Anthropologie drove $558.6 million in sales, up from $431.3 million in Q4 2021. Urban Outfitters’ sales rose to $474.3 million from $428.1 million. Free People’s sales reached $276.1 million from $219.2 one year prior. Rental platform Nuuly more than doubled sales from $6.6 million to $17.2 million in the same frame.

Former Club Monaco CEO and Ralph Lauren e-commerce and stores president Francis Pierrel joined the Urban Outfitters brand as North American president, reporting to Urban Outfitters and Free People Group global CEO Sheila Harrington. Urban CEO Richard Hayne described the fashion veteran as a “seasoned omni-channel retail executive with deep experience in managing iconic brands across all channels” whose leadership will “greatly benefit the Urban Outfitters brand.”

Simon Property Group

Mall giant Simon is worried about how inflation might factor into the months ahead as it comes off a year marked by recovery.

“For the year, we signed more than 4,100 leases for a total of more than 15 million square feet. This was the highest amount of leasing activity we have done over the last six years,” CEO David Simon told Wall Street analysts. He added that, “Mall sales for the fourth quarter were up 8 percent compared to the fourth quarter of 2019 and up 34 percent year-over-year. Reported retail sales per square foot reached a record level for 2021 at $713 per foot for our mall and outlet business and $645 for the mills.”

Investments with Taubman and Sparc, its Authentic Brands Group joint venture, “produced “terrific results in 2021,” the CEO added.

He noted that retail crime is becoming a massive “industry issue,” addressing the smash-and-grab thefts that have plagued retailers including Neiman Marcus. “As good as we are, we cannot avoid what’s happened. So we’re all subject to this,” he said, describing the crime surge as “a local jurisdiction issue” and a “nationwide issue.”

“I believe the tide is turning,” he continued. “We are all over this—the safety of our consumers and, obviously, the retailers is priority number one.”

In the fourth quarter, the REIT opened sites in South Korea, Tokyo and France and continues to make progress on redevelopments in Atlanta, Miami, New York’s Long Island, and Palo Alto, Calif.

Total revenue for the fourth quarter ended Dec. 31 rose 17 percent to $1.33 billion from $1.13 billion in the year-ago quarter. Total revenue includes a 19 percent gain in lease income to $1.22 billion, an 11 percent gain in management fees and other revenue, with the balance from other income.

Simon said the occupancy rate at the end of the quarter was 93.4 percent, up slightly from 91.3 percent in the year-ago period. In addition, the base minimum rent per square foot on Dec. 31 was $53.91. For the full year, total revenue increased 11 percent to $5.12 billion from $4.61 billion.

Net income for the quarter jumped 85 percent to $503.2 million, or $1.53 a diluted share, from $271.5 million, or 86 cents, in the year-ago quarter. FFO rose 42.4 percent to $1.16 billion, or $3.09 a diluted share, versus $786.6 million, or $2.17, in the year-ago quarter.

The company guided 2022 net income to $5.90 to $6.10 a diluted share for the year ending on Dec. 31.

For the year, net income more than doubled to $2.25 billion, or $6.84 a diluted share, from $1.11 billion, or $3.59, in the year-ago period.