As I’ve recently written, Tilly’s and Zumiez were kind of caught by surprise by their very positive end of October quarterly results. But because the surprise was of the positive kind, nobody seemed to care. Though perhaps they should.
The Buckle, on the other hand, reported a 14.6% decline in revenues from $280 million in last year’s quarter to $239 million in this years.
Zumiez’s 10-Q for its quarter ended October 31 reported an increase in sales and profits. I used the word “Too” in the article title because it sounds a bit like the Tilly’s results I reported a few days ago. Zumiez, like Tilly’s, would like to point to all the good things it’s doing as being responsible for the result. And no doubt it’s fair to do that, but Zumiez, like Tilly’s was surprised by the strength it’s seeing and is cautious as to whether it will continue.
Net sales rose 8.4% from $204.3 to $221.4 million. “The increase primarily reflected an increase in comparable sales of $8.2 million and the net addition of 35 stores (made up of 27 new stores in North America, 5 new stores in Europe, and 5 new stores in Australia partially offset by 1 store closure in North America and 1 store closure in Europe) subsequent to October 31, 2015. By region, North America sales increased $14.7 million or 7.8% and other international (which consists of Europe and Australia) sales increased $2.4 million or 14.6% for the three months ended October 29, 2016…”
You can’t fault the numbers. Sales grew 7.4% for the quarter ended October 29th compared to the same quarter last year. That got them to $152.1 million in revenue for the quarter. Comparable store sales rose 4.4%, accounting for $6 million of the revenue increase. “Store comps were up low-single digits and e-commerce continued to grow at a double-digit rate.” The rest of the increase ($4.4 million) came from five stores opened since the end of last year’s quarter.
Their gross profit margin, at 31.5%, didn’t change. A 1.1% decline in product gross margin due to higher markdowns was offset by a reduction in expenses.
This is a good time to remind you how retailers calculate cost of goods sold to arrive at their gross profit margin. Here’s how Tilly’s does it.
As part of a press release entitled “Solid Holiday Demand in the U.S. for GoPro HERO5,” GoPro announced, further down the press release, that its board of directors had “…approved a restructuring of the Company’s business. The restructuring includes a global reduction-in-force, the closure of the Company’s entertainment division and the consolidation of certain leased office facilities.”
“The Company estimates that it will incur total aggregate charges of approximately $24 million to $33 million for the restructuring, including approximately $13 million to $18 million of cash expenditures as a result of the reduction in force, substantially all of which are severance and related costs, and approximately $11 million to $15 million of non-cash expenditures, consisting primarily of stock-based compensation expense and accelerated depreciation associated with office consolidations. The Company expects to recognize most of the restructuring charges in the fourth quarter of 2016.”
I wouldn’t quite characterize this as an article as much as random musing about some internet experiences I’ve had. I can’t wait to see what I write.
My microwave broke. Not so much broke. The door wouldn’t latch so I couldn’t use it unless I stood there and held the door closed. Not particularly practical. I thought to myself, “Damn, it’s either a $150 service call or a new microwave.”
But for some reason, I went to YouTube and searched under “microwave door won’t close.” And the very first video that popped up was exactly that for my model. Literally 15 minutes later, I’d taken out a screw, popped part of the door away from the gasket, reinserted the stupid spring that had come lose (probably from the kid slamming the door too hard- unless it was his father who was doing it) and it was fixed.
Why Did The Great Recession Happen?
If you’ve ever looked at the suggested reading list on my web site, you know that I read some stuff that’s not related to business and certainly not to our industry. Not directly that is. But I think it helps me understand the environment we operate in and perhaps get a perspective I wouldn’t otherwise get.
William R. White is an economist who was recently awarded the apparently very prestigious Adam Smith prize. He presented a lecture when he accepted the prize called, “Ultra Easy Money: Digging the Hole Deeper?”` Read more
Billabong held its annual meeting on November 22. Back in August, I reported on Billabong’s results for the year ended June 30. Here’s the link to that article. The headline numbers then (all numbers in Australian dollars) were revenue from continuing operations of $1.10 billion and a net loss after tax of $23.7 million. I started that article with these points which seem just as relevant now as they did then.
I like to characterize a sudden good idea as getting whacked on the side of the head by a two by four. Today, I got whacked by a lily. My wife’s birthday is tomorrow and I walked into a convenient florist to order some flowers. Except what I walked into was a little café. Quite nice really, with people sitting on casual, older comfortable furniture eating, reading, drinking coffee.
For just a couple of seconds, I was a bit put off, thinking calling the place a flower shop was some kind of clever marketing I wasn’t cool enough to understand. But the flower shop was in the same space, but towards the back. I cannot believe I didn’t take a picture.
Deckers, as you know, owns Ugg, Teva, and Hoka as well as Sanuk and some other smaller brands. Their second quarter kind of reflected the economic and competitive conditions we’re seeing as most companies report their results. However, Deckers is making a solid overall profit.
Total revenue at $485.9 million didn’t change much. It was $1 million higher than last year’s quarter. Contrary to what we’re seeing in other companies, U.S. business rose $312.3 million, up from $301.5 million. International fell from $185.3 to $173.7 million. Wholesale revenues were $400 million and direct to consumer $86.0 million, both down very slightly.
I like GoPro’s strategy. Or at least, I don’t know what other strategy I could choose to pursue as a public company in their space. Here’s how they describe its evolution in the 10-Q for September 30. “What began as an idea to help athletes document themselves engaged in sport, GoPro has become an end-to-end storytelling solution that helps the world share itself through immersive and engaging content.” I’ll quote President Anthony Bates at some length, because it’s important to understand their concept.
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