Target's operating margin dropped from 30% to 26% year-over-year, as the retailer discounted inventory, navigated supply chain issues and increased staff wages. Analysts explained that Target's earnings highlight the increasing difficulty of getting the right product at the right time amid headwinds ranging from inflation to continued supply issues.
Direct-to-consumer glasses brand Warby Parker is focused on widening its suburban store footprint to grow sales. The retailer opened eight stores in the first quarter and plans to open 40 total across 2022, primarily in suburban locations. While analysts interviewed by Modern Retail praised the strategy as a smart diversification tactic for the brand, they warn about the costs of expanding too quickly in an inflationary environment.
Following troubling financial results from other big-box retailers this week, Kohl’s reported declining revenue and operating profit in the first quarter. The company’s results come on the heels of Walmart and Target, who’ve also taken a hit from economic headwinds like inflation, fuel costs and supply chain expenses. Kohl’s is also receiving pressure from activist investors and several takeover offers.
At Peloton, revenue dropped 23% year-over-year to $964 million in the brand's fiscal third-quarter earnings presentation today. Losses, meanwhile, grew to $757.1 million in the quarter. To return to growth, the brand plans to focus on growing membership in its fitness app, cutting prices of products to drive sales and expanding customer acquisition cheaply by entering third-party retail.
As inflation concerns rise, alcohol conglomerates are betting on more expensive drinks to drive sales. The "Above Premium" portfolio at Coors with brands like Blue Moon and the "Above core" portfolio at AB InBev with brands like Corona or Stella both grew their share of total revenue in the quarter.
Etsy's pandemic-induced sales bump appears to be coming to an end. The company’s net income came in at $86.1 million, down 40.1% compared to a year ago. Furthermore, Etsy sales increased by a lesser-than-expected rate, jumping about 5.2% from year-over-year. This marked the first time the company grew by just a single-digit rate during the pandemic. The slowing demand for Etsy’s marketplace goods is the latest example of e-commerce’s deceleration, especially as more people return to stores.
Covid vaccinations at CVS have sharply dropped to over 8 million in the first quarter from 20 million shots last quarter. Similarly, the number of Covid tests it administered dropped to 6 million from 8 million in the fourth quarter. Moving forward, CVS’s growth could depend on its other healthcare initiatives to boost foot traffic.
Despite inflation, CPG conglomerates outperformed first-quarter estimates after hiking prices. Last week, food and beverage conglomerates Coca-Cola, Hershey's, PepsiCo and Mondelez all surpassed earnings estimates, with year-over-year, first-quarter revenues up between 7% and 16%. While executives have described inflationary pressures as a potential headwind on profits, price increases have largely insulated these conglomerates' bottom lines.
All of Columbia’s brands saw sales increase across the board, but Sorel topped them all with a 37% year-over-year growth. As other retailers like Lululemon bet on the footwear market for growth, Columbia appears to be benefiting again from already having an established brand on its roster.
When the pandemic brought the rise of homeownership, the humanization of pets and the U.S. population’s exodus from bigger cities, Tractor Supply was one of the biggest beneficiaries. Though analysts said Tractor Supply’s growth is beginning to normalize, executives said the company is poised to continue profiting from these trends.
Historic inflation continues to concern retail brands, as they try to stay ahead of rising supply chain costs. This week, CPG conglomerate P&G warned that it will continue to increase prices to keep profit margins healthy over the coming year.
Grocery Outlet's sales declined 3% year-over-year in the fourth quarter, and growth at Albertsons and Kroger slowed to single digits. Amid this more competitive market, grocers are placing their bets on their fresh food items like deli, cheeses and produce with new product offerings and in-store refreshes.
Levi’s reported 22% year-over-year revenue growth during its first-quarter earnings call on Tuesday, driven largely by the popularity of wider-leg silhouettes. At Levi's, looser fitting styles accounted for about half of bottoms sales in the first quarter.
European fast-fashion retailers are leaning on price hikes and online sales as inflation and war in Ukraine hit profits. Modern Retail rounded up comments from Zara and H&M executives to look at the headwinds facing these retailers in 2022 -- and how they hope to overcome them with price hikes and online sales.
Walgreens' U.S. comp sales grew 14.7% year-over-year in the second quarter. The company administered 11.8 million Covid vaccines and 6.6 million tests in the second quarter alone, which experts said meant more store traffic and opportunities to purchase other items.
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