It’s All in the Guidance
At SGG and Associates, we are in the home stretch of our review of the quarterly performance reports of 250 consumer facing companies that we cover and are competing for share of the consumer’s spend, loyalty and “mindset”.
The combined impact of inflation and a consumer “reset” in purchase behavior and created tremendous shifts across multiple industry sectors. The Home Furnishings and Furniture sector, and Department Stores have all been affected negatively. The aspirational Luxury sector has slowed.
What should we expect for the rest of the year? It’s all in the Guidance provided by the businesses themselves. Here’s a snapshot of full year Fiscal 2024 performance estimates:
In Apparel, numerous Retailers and Brands have turned a corner and/or lapping prior year declines. Examples of full year positive Net Sales Guidance includes Abercrombie & Fitch +10%, American Eagle Outfitters +2 to 4%, Aritzia +8 to 12%, Birkenstock +20%, Crocs brand +7 to 9%, Deckers (led by Hoka) +10%, Guess 11 to 13%, Oxford Industries 4 to 6%, Sketchers 8 to 10%, and Steve Madden 11 to 13%.
In Beauty, a consumer focus on “self” and “wellness” is driving significant growth for several Brands: Beiersdorf (Nivea) +6 to 8%, e.l.f 20 to 22%, Inter Parfums +10%.
Guidance in the Fitness / Sports sectors is quite mixed. But those forecasting full year growth include Acushunet ( Foot Joy) and Calloway 3 to 5%, Asics 3.4%, Dick’s 2 to 3%, Adidas, Nike and Puma all forecast growth at mid to high-single-digit rates. ON Running continues to outperform, forecasting +30% for the year. While Lululemon Comps have slowed, they still forecast an ambitious +11 to 12% growth.
The Off-Price sector, which has had a non-stop growth trajectory, is continuing to forecast growth for this year, however, at a more tempered pace. Guidance for comparable growth this year: Burlington +0 to 2%, Ollie’s +1 to 2%, Ross Stores +2 to 3%, and TJX +2 to 3%.
Overall, the Retail Sector is forecast by the NRF to grow 2.5% and 3.5% in 2024. That forecast means that while there will be plenty of winners and outperformers, as we’ve described, but they will be balanced by a significant number of underperformers as well.
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