How global fashion retailers performed in 2022


    The year 2022 has been challenging for global fashion—COVID-19 hangover, prolonged Ukraine war, escalating raw material and fuel prices, interrupted supply chains and fluctuating exchange rates. The global fashion companies nevertheless continued to function with these challenges-in-tow, and reported their January-December 2022 performance by February 2023, forming the basis of this evaluation feature.

    The results of fashion retail companies are segregated as strong, moderate and weak based on their sales and profitability during the challenging period.

    The year 2022 has been challenging for global fashion—COVID-19 hangover, prolonged Ukraine war, escalating raw material and fuel prices, interrupted supply chains and fluctuating exchange rates. The results of fashion retail companies are segregated as strong, moderate and weak based on their sales and profitability during the challenging period.

    Strong – Growth In Both Sales And Profitability

    HERMÈS (EPA: RMS): Hermès International or simply Hermès, is a French luxury design house established in 1837, which specialises in leather goods, lifestyle accessories, home furnishings, perfumery, jewellery, watches and ready-to-wear. Its great sales momentum recorded at the end of September continued in Q4 too, with sales of €2,991 million – an increase of 26 per cent at current exchange rates and 23 per cent at constant exchange rates.

    For full FY22, the group reported consolidated revenue of €11,602 million, up 29 per cent at current exchange rates and 23 per cent at constant exchange rates compared to 2021. Recurring operating income amounted to €4,697 million – 40.5 per cent of sales (39.3 per cent at €3,530 million in 2021). The group’s net profit reached €3,367 million (29 per cent of sales), increasing 38 per cent from €2,445 million in 2021. The operational investments figure summed at €518 million, while adjusted free cash flow reached €3,405 million. The annual performance was notably due to the good performance of its international markets.

    The scheduled General Meeting on April 20, 2023 will declare a dividend proposal of €13.00 per share of which an interim dividend of €3.50 was paid on February 22, 2023. Despite the economic, geopolitical and monetary uncertainties around the world, the group confirmed an ambitious goal in the medium-term for revenue growth at constant exchange rates.

    LVMH MOËT HENNESSY LOUIS VUITTON SE (EPA: MC): LVMH Moët Hennessy Louis Vuitton, one of the world’s leading luxury goods Group, recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23 per cent y-o-y. The largest among Group’s businesses, the fashion and leather goods segment reached record levels with 25 per cent growth (20 per cent on organic basis). Europe, the US and Japan rose sharply, benefitting from strong demand from local customers and the recovery of international travel. Asia was relatively more stable due to developments in the health situation in China. Operating margin remained at the same level of 2021. Group’s share of net profit at €14.1 billion was up 17 per cent with operating cash flow surpassing €10 billion mark. Profit from recurring operations of fashion and leather goods business grew 22 per cent.

    At the General Meeting of April 20, 2023, LVMH will propose a dividend of €12 per share – an interim dividend of €5 already paid on December 5, 2022 while balance to be paid on April 27, 2023. The group will pursue its brand development focused strategy in 2023 underpinned by continued innovation and investment.

    DELTA GALIL INDUSTRIES (TLV: DELT): Incepted in 1975, Delta Galil Industries is a global manufacturer and marketer of branded and private label intimate, active and lounge wear, and denim for men, women and children. The company released its Q4 and full year results for FY22 in mid-February. On quarter-to-quarter comparison with FY21, sales decreased 6 per cent (2 per cent in constant currency) to $544.4 million; EBITDA decreased 12 per cent (10.56 per cent of sales) to $56.9 million; and, diluted earnings per share decreased 16 per cent $1.35.

    For complete 2022, sales increased 4 per cent (7 per cent in constant currency) to a record $2,031.5 million; EBITDA increased 1 per cent to $190.2 million (9.4 per cent of sales) – also a record; while diluted earnings per share decreased 3 per cent to $4.14. With the balance sheet remaining strong reflecting $194.9 million in cash and short-term deposits, and record equity of $710.3 million as of December 31, 2022, a dividend of $8 million was declared to be distributed on March 14, 2023.

    The company plans to continue investing in its digital capabilities and further extending its private label offerings to iconic and digitally native global brands in 2023. The launch of a new brand such as Polo Ralph Lauren and enhancement of its flexible global supply chain with a new factory in Vietnam and Egypt, are also part of the plan.

    HUGO BOSS AG, (ETR: BOSS): The German fashion company which is into the business of clothing, accessories, footwear and fragrances, announced its preliminary results for FY22 in mid-January – 50-days prior to final results scheduled for March 9, 2023. Following its stellar business performance in the first nine months of 2022, BOSS maintained its strong momentum in the fourth quarter of the year as well. Currency-adjusted Group sales in Q4 grew 15 per cent (+29 per cent vs 2019) led by robust momentum in EMEA (+18 per cent) and the Americas (+17 per cent). Even in reporting currency, sales grew by 18 per cent y-o-y to €1,068 million (€905 million in Q4, FY21) thereby exceeding €1 billion mark for the first time in its history. The performance is attributed to the successful execution of various key brand, product and sales initiatives as part of the company’s ‘CLAIM 5’ strategy, which drove robust consumer demand for BOSS and HUGO throughout the quarter.

    On full year basis, the currency-adjusted sales were up 27 per cent to a record level of €3,651 million compared to FY21. Subject to the completion of year-end closing procedures, the Group anticipates the full year operating profit (EBIT) to increase by 47 per cent to an amount of €335 million, exceeding current market expectations (guidance: increase between 35-45 per cent to a level of €310-330 million; 2021: €228 million). As a result, the EBIT margin for FY22 is expected to increase to a level of 9.2 per cent (2021: 8.2 per cent).

    KERING SA (EPA: KER): As a global luxury group, Kering SA manages the development of a series of renowned Houses of fashion, leather goods and jewellery through a rich brand portfolio of Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin as well as Kering eyewear. In its mid-February announcement of FY22 result, the group reported its full year revenue exceeding €20 billion – an increase of 15 per cent as reported and 9 per cent on a comparable basis. The revenue from directly operated retail network, that includes e-commerce sites, rose 10 per cent on a comparable basis in 2022, driven particularly by Western Europe and Japan. In the Q4, FY22, however, total sales were down 2 per cent y-o-y as reported and 7 per cent on a comparable basis, with mixed performances across Houses and regions. All Group activities contributed to the 11 per cent rise in recurring operating income, which reached €5.6 billion (27.5 per cent of sales). Net profit attributable to the Group, amounting to €3.6 billion, was up 14 per cent while free cash flow from operations remained high at over €3.2 billion and earnings per share was up 15 per cent.

    In its outlook amidst economic and geopolitical uncertainty in the near term, Kering chose to continue to execute on its strategy and vision, in pursuit of two key ambitions – maintain a trajectory of profitable growth resulting in high levels of cash flow generation and return on capital employed.

    OVS S.P.A. (BIT: OVS): A leading Group in the men’s, women’s and children’s clothing market in Italy, OVS SpA has 9.3 per cent market share. In its January-end release, the Group announced its strong sales performance over first three quarters continuing in the fourth one too, including Christmas and the major winter sales period with consolidated net sales of roughly €420 million – up 11 per cent compared to Q4, FY21. Margin also improved with Q4 consolidated EBITDA up more than 10 per cent y-o-y. Overall, consolidated net sales for full financial year exceeded €1.5 billion – also an increase of 11 per cent over previous financial year, contributing a free cash flow of more than €60 million. Compared to the scenario of several past months, the group sees inflationary pressures on costs that characterised 2022 slowdown, now expected to reverse in the second half of 2023. In terms of sales, with consumer trends also showing positive signs, OVS is expecting further growth in 2023 owing to the solidity of its current projects and operations.

    AEFFE S.P.A. (BIT: AEF): On January 26, 2023 the Board of Directors of Aeffe S.p.A. – a luxury products company listed in the STAR segment of Borsa Italiana, operating both in the prêt-à-porter, and in the footwear and leatherwear segments with extremely well-known brands – including Alberta Ferretti, Philosophy di Lorenzo Serafini, Moschino and Pollini – announced its preliminary sales figures for full FY22. The fiscal year ended with consolidated revenue of €352 million – an increase of 8.4 per cent (7.7 per cent in constant exchange rates) over FY21. The prêt-à-porter division contributed €231.8 million in total revenue. The sales, primarily driven by wholesale business, was dominated by Italy market (41.1 per cent revenue share) growing 9.4 per cent and Europe market (33.4 per cent revenue share) growing 11.6 per cent. No update on other performance metrics was available at the time of publishing.

    Moderate – Growth In Either Sales Or Profitability

    COLUMBIA SPORTSWEAR COMPANY (NASDAQ: COLM): Columbia Sportswear Company is the multi-brand global innovator in outdoor, active and lifestyle products including apparel, accessories, footwear and equipment. As per its fourth quarter and full FY22 results, the concluding quarter sales of $1,169.6 million was an increase of 4 per cent over Q4 FY21, driven by Columbia brand growth, partially offset by declines in net sales in the emerging brands. Gross margin contracted 180 basis points to 50.4 per cent from 52.2 per cent on quarter comparison. The primary driver of gross margin contraction was increase in promotional activity – aggregate expense increasing to $405.1 million (34.6 per cent of net sales) from $384 million (34 per cent of net sales) in 2021. Consequently, operating income decreased 27 per cent to $155.4 million inclusive of $35.6 million of impairment charges related to prAna – the yoga-inspired apparel brand bought in 2014.

    In full year terms, net sales increased 11 per cent (14 per cent in constant currency) to a record $3,464.2 million over FY21. The operating income, however, decreased 13 per cent to $393.1 million (11.3 per cent of net sales) from $450.5 million (14.4 per cent of sales in 2021). At the same time, the company reported a 7 per cent reduction in diluted earnings per share at $4.95 ($5.33 in FY21). The financial performance could have been different had there been less supply chain constraints which severely delayed inventory availability throughout the year.

    With no major foreseeable disruption during FY23, the company is expecting 3-6 per cent growth with net revenue of $3.57-3.67 billion; and, the operating income between $413 million and $448 million (11.6-12.2 per cent of sales) to yield diluted earnings per share in the range of $5.15 to $5.55.

    Weak – Growth Neither In Sales Nor Profitability

    HANES BRANDS INC. (NYSE: HBI): Hanes Brands Inc., a global player of iconic apparel brands including Hanes, Champion and Bonds, declared its fourth quarter and full year results in early February along with FY23 outlook. The quarter’s net sales of $1.47 billion including $55 million unfavourable impact from foreign exchange rates, was 16 per cent below last year’s same quarter sales – decreasing 13 per cent on constant currency, driven by slowdown in consumer spending in the US and certain international markets coupled with the continued impact to orders in the US from retailers’ decisions to reduce broader inventory positions. Gross margin of $502 was a 25 per cent decline effecting 34.1 per cent of sales (38.1 per cent during Q4, FY21). With reduced expenses at $442 million, the ending quarter’s operating profit and margin ended $60 million and 4.1 per cent, respectively ($156 million and 8.9 per cent in 2021).

    Full year result was on similar line – net sales was down 8 per cent to $6.23 billion and nearly 6 per cent down on constant currency basis. Gross profit for the fiscal declined 16.2 per cent to $2.22 billion – 35.6 per cent of net sales against 39 per cent in previous year, yielding an operating profit of $520 million (8.3 per cent of sales) as against $798 million (11.7 per cent of sales) in FY21.

    For FY23, the company sees net sales of $6.05-6.20 billion including a projected headwind of approximately $42 million from changes in foreign currency exchange rates; adjusted operating profit to range from around $500 to $550 million, including a projected ~$6 million headwind emanating from foreign currency exchange rates; and, adjusted earnings per share from continuing operations to range between ~$0.31 and $0.42.

    ADIDAS AG (ETR: ADS): The world’s largest sports company Adidas AG reported 1 per cent increase in currency-neutral revenue of FY22 as per its unaudited numbers released in February. In reported terms, the 6 per cent growth amounts to €22,511 million compared to €21,234 million in FY21. The gross margin at 47.3 per cent was below 50.7 per cent of FY21. The operating profit for the fiscal plunged even lower, from €1,986 million in 2021 to €669 million in 2022, representing a margin of 3 per cent compared to 9.4 per cent in the prior fiscal. Net income from continuing operations was €254 million against €1,492 million a year back. The gloom is expected to continue as per company’s FY23 guidance released in the same month. The guidance lowered FY23 revenue by around €1.2 billion and operating profit by around €500 million – a possible write-off, as a consequence of company’s inability to sell the existing Yeezy stock. Additionally, Adidas expects one-off costs of up to €200 million as part of a strategic review that the company is currently conducting, aimed at reigniting profitable growth in 2024, making it an aggregate operating loss of €700 million.

    Fibre2Fashion News Desk (WE – SB)

    Originally Posted Here

    Popular Posts

    More like this

    Celebrity Memorial Day Weekend Throwbacks in Photos – Hollywood Life

    View gallery Everybody — even celebrities — love celebrating...

    Home Alone House Listed for Sale for $5.25 Million

    The iconic house from original Home Alone movie...

    Jessica Lange is ‘The Great Lillian Hall’ in Trailer for HBO’s New Movie

    Jessica Lange is 'The Great Lillian Hall' in...

    Yashoda Full Movie Hindi Dubbed Release Date | Samantha New Movie | South Movie | New Movie

    Yashoda Full Movie Hindi Dubbed Release Date Samantha New...
    Celebrity Memorial Day Weekend Throwbacks in Photos – Hollywood Life
    Glen Powell Reminds Us He’s in ‘Spy Kids 3’, Compares it to ‘Dune’
    Kate Middleton Will Reportedly Return to Public Duties in Fall 2024 – Hollywood Life
    Massiel Taveras Shoves Security Guard Who Argued With Kelly Rowland
    A Mad Max Saga Movie Review
    Babes Movie Review
    In a Violent Nature Movie Review
    Thelma Movie Review
    Carson Daly Reveals Trouble Blake Shelton Caused On ‘The Voice’
    Days of Our Lives Spoilers for the Week of 5-27-24: Heartbreaking Scenes For Eric, But At Least The Baby-Switchers Face Some Consequences
    Chris McNally Warns Dark Times Are Ahead For Lucas
    The Top Moments From The King & Queen of the Ring 2024!
    Home Alone House Listed for Sale for $5.25 Million
    Sting Kicks Off “Sting 3.0 Tour” with Hits, Deep Cuts: Video + Setlist
    Nicki Minaj Arrested in The Netherlands for Marijuana
    Dream Theater’s Mike Portnoy Attempts Complex Tool Song
    This Curl Gel Gives Me 'Day One' Hair for a Full Week
    AI can reduce fast fashion’s carbon footprint: UNSW Research
    How To Dress Like A (Cool) Dad
    Nicolas Ghesquière Puts His Spin on Spanish Fashion for Louis Vuitton Cruise 2025
    Horror Elements in Call of Duty
    Official Trailer: Pale Horse: A Psycho Sexual Odyssey starring Eileen Dietz, Chris Connell, & Alexandra Bard
    Dreaded Invocations: 14 Frightening Tales to Utter in Hushed Tones
    Horror in the Forest Review
    Jessica Lange is ‘The Great Lillian Hall’ in Trailer for HBO’s New Movie
    Yashoda Full Movie Hindi Dubbed Release Date | Samantha New Movie | South Movie | New Movie
    'Beetlejuice Beetlejuice' Trailer
    Trap | Official Trailer
    Main Parwaana – Pippa | Ishaan | Arijit Singh | A. R. Rahman | Shellee
    Pari Ama Pari | Full Music Video | Odia New song | Rajendra | Deepanjali | Yashi | S Jitu | Soujanya
    Justin Timberlake – TKO (Official Video)
    Popcaan, Jafrass, Quada – Unruly Camp (Official Video)