Global Luxury Goods, Apparel, and Retail Companies Earnings Summary (Q2 2015)

Luxury Goods

LVMH's holding company Dior Group (Christian Dior) released its financial results for the fiscal year ending June 30, 2014-15. Dior brand's revenue in the second half increased from €745 million in the same period last year to €911 million. The brand's profit from continuing operations in the second half surged 34.2% year-on-year to €106 million. For the full 2014-15 fiscal year, Dior brand revenue rose 17.6% year-on-year to €1.765 billion; profit from continuing operations reached €226 million, up 20.9% from the previous fiscal year. Including LVMH, Dior Group's overall revenue in the second half rose 19.4% year-on-year to €17.608 billion, compared to €14.742 billion in the same period last year; full-year revenue totaled €35.081 billion, up 13.7% from €30.867 billion in the previous fiscal year.

The world's largest luxury goods manufacturer LVMH announced a 15% profit increase in the first half of this year, beating market expectations, thanks to accelerated sales of fashion items and leather goods, as well as a recovery in the wine and spirits division. Profit from recurring business in the first half rose to €2.96 billion, with strong growth in both European and US markets. Revenue reached $16.7 billion, up 19% year-on-year, and 6% excluding currency effects.

Thanks to Gucci's first growth in two years, Kering SA reported first-half results that exceeded analyst expectations. The company's operating profit from continuing operations recorded a 5.4% decline to €773 million. Kering's first-half sales reached €5.5 billion, up 17% year-on-year, with comparable growth of 3.5%. Gucci's comparable sales grew 4.6% in the second quarter of the fiscal year.

Prada announced preliminary sales figures for the first half ending in late July this year, with net consolidated revenue up 4% year-on-year to €1.823 billion, driven by retail channels more than offsetting declines in wholesale sales. Wholesale sales totaled €248 million during the period, down 14% at current exchange rates. The group's retail network sales grew 8% at current exchange rates to €1.552 billion. During the period, the Prada brand recorded 5% growth, Miu Miu 19% growth, Church's 19% sales growth, and Car Shoe performed roughly in line with last year.

Luxury giant Burberry Group's same-store sales growth slowed in the second quarter this year, mainly due to weakened luxury consumption demand in Hong Kong and other Asia-Pacific countries. In the second quarter ending June this year, Burberry's same-store sales grew 6%, compared to 12% in the same period last year. The group's retail revenue for the quarter reached £407 million, a 10% increase; last year's retail revenue was £370 million.

French luxury company Hermes International reported that in the half fiscal year ending in June, the company's net profit increased 17% to €483 million compared to €413 million in the same period last year. Revenue for the half fiscal year was €2.3 billion, up 22% year-on-year, mainly due to the depreciation of the euro against major international currencies and a 33% sales increase in the Japanese market. Excluding currency effects, revenue grew 9% year-on-year in the half fiscal year.

German Hugo Boss AG accelerated growth in the second quarter, benefiting from a recovery in the European market and retail expansion, with sales and profits exceeding market expectations. The group's second-quarter sales rose 15.8% year-on-year to €647.1 million, compared to €558.9 million in the same period last year. EBITDA before interest, taxes, depreciation, and amortization was €123.3 million, up 11.9% year-on-year. Net profit increased 12.6% to €70.7 million.

Italian luxury brand Salvatore Ferragamo SpA announced its half fiscal year results. For the half fiscal year ending June 30, the group's net profit rose 13% to €88 million from €78 million in the same period last year. Total revenue increased 10% from €659 million to €722 million year-on-year. Sales rose 2% at constant exchange rates.

Constrained by the Tods brand and the group's Greater China market, especially the Hong Kong and Macau markets, Italian luxury group Tods Group SpA's net profit in the first half fell 10.3% to €50.379 million, compared to €56.154 million in the same period last year; benefiting from a weak euro, first-half sales increased 7.9% to €515.3 million, with only 1.8% growth at constant exchange rates.

American high-end apparel manufacturer Ralph Lauren reported that first-quarter earnings beat market expectations, but adverse currency movements continued to drag revenue growth. For the fiscal quarter ending June 27, the company's net profit fell from $162 million in the same period last year to $64 million. Revenue declined 5.3% to $1.62 billion.

Calvin Klein and Tommy Hilfiger apparel producer PVH reported second-quarter profits and revenue exceeding expectations, driven by increased demand for Calvin Klein apparel and accessories. In the second quarter ending August 2, the group's net profit decreased 19.2% year-on-year to $102.2 million. Total group revenue was $1.884 billion, down 4.6% from $1.9756 billion in the same period last year, with a 2% increase at constant exchange rates.

American luxury handbag brand Coach reported fourth-quarter revenue declined year-on-year but still exceeded expectations. Coach's fourth-quarter revenue was $1 billion, below last year's $1.14 billion. The company's net profit was $12 million, down from $75 million in the same period last year. North American sales regions and physical store sales data continued to rise. The company's international business also saw very good growth, benefiting from increased sales in Europe and China.

High-end apparel and accessories company Michael Kors reported quarterly results showing net profit of $174.4 million in the first fiscal quarter, compared to $187.7 million in the same period last year. Operating revenue grew 7.3% to $986 million.

Apparel, Bags, Retail

American apparel manufacturing giant VF Corp. reported second-quarter revenue up 5% to $2.5139 billion as of June 30, surpassing analyst expectations. Operating profit rose 1% to $223 million; net profit increased about 8% to $170.8 million. However, the company's second-quarter inventory rose 8%, exceeding revenue growth. Revenue from the outdoor and extreme sports brand division increased from $1.2791 billion in the same period last year to $1.3963 billion. The denim division's second-quarter revenue slightly increased from $605.8 million to $608.2 million. The uniform division's second-quarter revenue remained flat at $248.8 million.

Victoria's Secret parent company L Brands Inc. reported a 7.5% increase in net profit for the company's second fiscal quarter, rising from $188.4 million in the same period last year to $202.5 million. Revenue for the three months ending August 1 grew 3.4%, from $2.66 billion last year to $2.77 billion. Comparable store sales increased 4%. Victoria's Secret comparable store sales grew 3%, while Bath & Body Works also showed strong growth, up 5%.

Guess Inc. recorded a profit of 18.3 million USD in the second quarter of fiscal year 2016, compared to a profit of 22 million USD in the same period last year. The retailer stated that its sales for the second quarter declined from 608.6 million USD last year to 546 million USD.

Skechers USA Inc. saw a significant increase in earnings in the second quarter, with earnings per share exceeding analyst expectations. Skechers reported a second-quarter profit of 79.8 million USD, compared to earnings per share of 34.8 million USD in the same period last year. The company's net sales for the second quarter were 800.5 million USD, a 36% year-over-year increase.

Crocs Inc., the clog manufacturer, met market expectations for revenue in the second quarter but saw a sharp year-over-year decline in net profit. In the quarter ending June 30, Crocs recorded a net profit of 9.69 million USD, a 50.4% drop from 19.523 million USD in the same period last year; revenue fell 8.3% year-over-year to 345.7 million USD.

Luggage manufacturer Samsonite's mid-year net profit fell 2.67% year-over-year to 94.39 million USD. On a constant currency basis, it rose about 8.9%, reflecting the impact of exchange rates. During the period, adjusted net income decreased 3.5% to 102 million USD, but rose 7.2% on a constant currency basis; adjusted EBITDA increased 1.8% to 190 million USD, up 8.4% on a constant currency basis. Net sales rose 8.2% year-over-year to 1.197 billion USD, with all operating regions achieving steady net sales growth.

Due to continued weakness in its brands Gap and Banana Republic, as well as costs from store closures and layoffs, Gap Inc.'s second-quarter profits and sales continued to decline. For the second quarter ending August 1, Gap Inc.'s net profit fell 34% year-over-year to 219 million USD from 332 million USD. Net sales dropped 2% year-over-year to 3.9 billion USD from 3.98 billion USD. On a constant currency basis, net sales for the second quarter of fiscal 2015 were flat compared to the same period last year.

Swedish fashion retail giant H&M reported an 11% profit increase in the second quarter, thanks to higher sales. For the quarter ending May 30, net profit rose to 6.45 billion SEK (approximately 783.5 million USD), compared to 5.81 billion SEK in the same period last year. Excluding VAT, sales for the quarter increased to 45.87 billion SEK, up from 37.83 billion SEK last year. In addition to significant investments in online business, H&M also expanded its beauty product line and planned to open 900 new stores starting in July.

Fast Retailing, owner of the casual wear brand Uniqlo, released its financial report for the first three quarters of fiscal 2015 (September 2014 to May 2015). Sales revenue increased 23.9% year-over-year to 1.3481 trillion JPY (approximately 68.6 billion RMB), and net profit rose 51.5% to 132.3 billion JPY, both reaching record highs for the period. Overseas Uniqlo business performed well, with operating profit increasing 55%. Due to higher temperatures in Japan during April and May, sales of Uniqlo's summer products also grew.

American Eagle Outfitters Inc. released its second-quarter financial report, with earnings and sales exceeding Wall Street analyst expectations. For the quarter ending August 1, American Eagle's total net revenue was 797 million USD, a 12% increase year-over-year. Net profit was 33.3 million USD, significantly higher than 5.8 million USD in the same period last year.

Teen apparel retailer Abercrombie & Fitch Co. reported quarterly results showing that the company's second fiscal quarter profit and revenue exceeded expectations. The company posted a net loss of 800,000 USD for the quarter ending August 1, compared to a profit of 12.9 million USD in the same period last year. Sales declined 8% to 817.8 million USD. Same-store sales fell 4% during the quarter.

Sporting Goods

NIKE, Inc. released its fourth-quarter financial report, with sales revenue and earnings exceeding market expectations. Revenue was 7.78 billion USD.

Adidas Group's net profit for the second quarter rose to 146 million EUR, higher than last year's 144 million EUR. Stimulated by the FIFA World Cup, revenue increased, and after accounting for exchange rate fluctuations, sales rose 5% to 3.9 billion USD. Organic sales in Greater China and Western Europe increased by 19.3% and 12%, respectively.

German sportswear giant Puma SE exceeded market expectations for both revenue and profit in the second quarter. For the quarter ending June 30, Puma achieved an operating profit of 6.8 million EUR, a sharp 46.0% decline from 12.6 million EUR in the same period last year. Dragged down by a stronger dollar and increased marketing expenses, Puma turned to a net loss of 3.3 million EUR in the second quarter, compared to a net profit of 4.2 million EUR in the same period last year. Revenue grew 18.5% year-over-year to 772.7 million EUR.

American sportswear brand Under Armour Inc. reported second-quarter financial results showing adjusted net profit of 14.8 million USD, compared to 17.7 million USD in the same period last year. Operating revenue grew 29% year-over-year to 784 million USD, exceeding the expected 762 million USD.

American sporting goods retailer Dick's Sporting Goods reported quarterly results showing a second-quarter net profit of 90.8 million USD for the period ending August 1, compared to 69.5 million USD in the same period last year. Sales increased 7.9% to 1.8 billion USD. Same-store sales rose 1.2%.

Foot Locker Inc., a sneaker retailer, reported quarterly results showing second-quarter profit rose to 119 million USD, compared to 92 million USD in the same period last year. Operating revenue for the quarter (ending August 1) grew 3.3% to 1.7 billion USD, with same-store sales increasing 9.6%.

China's leading sports brand Li Ning Company Limited announced a significant narrowing of its net loss for the first half of the year, with EBITDA and operating cash flow turning positive. For the half-year ending June, Li Ning's net loss narrowed sharply to 29.41 million RMB from 586 million RMB in the same period last year; EBITDA reached 260 million RMB, compared to a loss of 351 million RMB last year; operating cash flow also turned positive, reaching 165 million RMB from a negative figure in the same period last year.

Jewelry and Watches

Swiss watchmaker Swatch Group AG released its half-year report. Affected by the appreciation of the Swiss franc and the Swiss government's negative interest rate policy on the group, Swatch Group's net profit fell 19% in the first half of this year. In the six months ending June 30, Swatch Group's net profit dropped to 548 million CHF (approximately 575 million USD), compared to 680 million CHF in the same period last year. Swatch Group's net sales for the first half of this year reached 4.19 billion CHF, an increase of 2.2%; last year it was 4.1 billion CHF.

The world's largest eyewear manufacturer Luxottica Group reported that its second-quarter earnings and revenue both hit record highs, driven by growth in emerging markets. The report showed that adjusted net profit for the second quarter increased 34% to 314 million EUR, exceeding market expectations. Revenue grew 19% to 2.46 billion EUR, benefiting from strong demand for its products, especially in China, Southeast Asia, Brazil, and Mexico. At current exchange rates, sales in the Chinese market grew 48% in the second quarter.

High-end jeweler Tiffany's revenue declined for the second consecutive quarter, affected by reduced spending from American travelers and the stronger US dollar reducing overseas revenue impact. As of the fiscal quarter ending July 31, the company's profit fell to $104.9 million, compared to $124.1 million in the same period last year. Operating revenue decreased from $992.9 million to $990.5 million, with sales declines in the Americas offsetting growth in Asia and Europe.

Seiko Holdings Corporation's financial report for the first quarter of fiscal 2015 (April to June) showed sales increased 10.0% year-on-year to 70.6 billion yen, and net profit surged nearly fourfold to 3.7 billion yen, marking the highest for the same period since fiscal 2003. The main reasons were strong sales of domestic high-end watch brands such as "GRAND SEIKO" and "ASTRON." Demand from overseas tourists, mainly Chinese, also surged. The semiconductor and other electronic components business remained strong due to the yen depreciation and increased sales.

　　 Toys

American toy manufacturer Mattel reported its financial results for the second quarter of 2015, with revenue of $988 million, compared to $1.062 billion in the same period in 2014. Net profit was $11.4 million, compared to $28.3 million in the same period in 2014.

American toy manufacturer Hasbro Inc reported a 4% decline in quarterly revenue, impacted by a strong US dollar. Net profit attributable to Hasbro for the second quarter ended June 28 rose to $41.8 million, compared to $33.5 million in the same period last year. Net revenue fell from $829.3 million to $797.7 million, but revenue excluding exchange rate effects grew by 5%. The company's second-largest revenue source, the gaming business, saw a 6.2% decline in revenue for the quarter.