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Yahoo
4 days ago
- Business
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5 years after US bankruptcy, Roots notches third quarter of sales growth
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Five years after Canadian brand Roots shuttered its U.S. operations in bankruptcy, pivoting to an e-commerce-first approach in the country, the brand recorded its third consecutive quarter of year-over-year sales growth. Sales grew 6.7% in Q1, reaching 40 million Canadian dollars ($29.5 million as of press time). As part of a multiyear strategy, Roots is closing underperforming stores and focusing resources on 'high potential locations' that have strong brand resonance, customer engagement and long-term profitability, CEO Meghan Roach said on a call with analysts. Roots is also updating its existing fleet with a new store design that includes refreshed merchandising layouts, digital screens and flexible fixtures that allow for regular changes to highlight seasonal stories. The retailer still operates two stores in the U.S. and said at the time of its exit in 2020 that it believed in the market opportunity in the country. Roots is beefing up its marketing and investing in physical stores as it seeks to increase conversion across channels. DTC sales in the quarter grew 10%, with comps up 14%, but the retailer still netted a loss of CA$7.9 million in the quarter. Executives said losses were expected given Roots only does 30% of its business in the first half of the year and usually comes out positive in the second half of the year. Net debt was down 6.7% in the quarter, to CA$29.6 million, and the brand had a net leverage ratio of 1.3 times. Roots also updated its credit terms to extend maturity to 2027. The retailer hired a new head of omnichannel growth in the quarter and discussed plans to update its stores and operations. Roots is investing in product development and sourcing and merchandising improvements, with the aim of reducing time to market. In-stock levels also improved in the quarter. When it comes to store design changes, those are based on customer feedback and in-store analytics, according to Roach, and are aimed at improving the store experience. 'The goal is to create a more immersive, intuitive and inspiring retail environment, one that aligns with our brand direction and deepens emotional connection with customers,' Roach said on a Friday call, according to a Seeking Alpha transcript. 'Our stores are not only a point of sale but extensions of our brand ethos, and we remain committed to ensuring they deliver both inspiration and convenience.' Executives also discussed plans to invest more deeply in marketing to communicate the turnaround work it has done over the past five years, which has included assortment improvements, an activewear launch and a more fashion-forward focus. 'We want to make sure that we're getting those new products in front of consumers and also making sure that we're speaking to them about the modernization we've done around the brand,' Roach said. 'So you will continue to see us investing behind paid media.' Roots also launched a brand ambassador program a year ago, which has 'exceeded overall expectations.' Roach said influencers are a 'key driver' of the brand's marketing strategy and noted the brand recently signed a deal with NCAA women's basketball player Toby Fournier, who will appear in marketing content and sport Roots apparel. Roach described the marketing strategy, introduced at the end of last year, as 'multipronged' and said the company has also seen success with in-store events like International Sweatpants Day. It's planning to host more in the year ahead. 'We have seen the strong momentum gained from investing in authentic brand storytelling, increased brand reach and memorable brand experiences,' CFO Leon Wu said on the call. 'We continue to believe in our long-term growth benefits unlocked through marketing and anticipate similar levels of increased spend in the second quarter, accelerating as we enter our peak fall and holiday season.' Editor's note: This story first appeared in the Retail Dive: Operations newsletter. You can sign up for it here. Recommended Reading Despite 18% sales drop, Allbirds says it could return to top-line growth in Q4 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-06-2025
- Business
- Yahoo
GameStop sales drop in key categories amid ongoing strategic shift
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. As it continues to evaluate its store footprint, GameStop's first quarter net sales dropped about 17% year over year to $732.4 million, according to a company press release Tuesday. The retailer swung to a $44.8 million net income, compared to a $32.3 million loss in Q1 last year. Additionally, operating loss improved from $50.6 million to $10.8 million in the most recent quarter, factoring in $35.5 million of impairment charges 'related to international restructuring efforts,' per the release. Sales dropped 26.7% in GameStop's software category, while hardware and accessories declined 31.7%. Meanwhile, collectibles net sales increased 54.6% in the quarter. GameStop's sales slump in key categories comes as the retailer says it is focused on establishing 'omnichannel retail excellence,' per a Securities and Exchange Commission filing. The company, which did not hold an earnings call or provide forward-looking guidance, is aiming to become a leading destination for gaming and entertainment through its online platform and physical stores. However, the retailer has actively shrunk its overall store footprint, closing nearly 600 U.S. locations last year. GameStop has also turned an eye to its global operations, winding down or pursuing sales of its business in several international markets including Canada, Italy, Germany and France. In Q1, GameStop said it recognized an $18.3 million impairment expense related to the Canadian exit and an impairment expense of $17.2 million on the French departure. GameStop plans to close further stores in fiscal 2025, but has yet to identify specifics. GameStop's gross profit increased 3.4% to $252.8 million in Q1, mainly due to 'a shift to higher margin product categories, specifically collectibles and preowned hardware and accessories,' per the SEC filing. The retailer's Q1 results preceded the release of the highly sought-after Nintendo Switch 2 gaming console, which launched on Thursday and is available for purchase at GameStop, in addition to other retailers. Notably, the retailer hasn't been shy when it comes to investment in cryptocurrency. The company purchased 4,710 bitcoins in May, worth around $500 million at the time of purchase. The company's board had voted unanimously to add bitcoin as a treasury reserve asset in March. While its interest in cryptocurrency has increased under CEO Ryan Cohen, the company shuttered its NFT marketplace 'due to the continuing regulatory uncertainty of the crypto space' in 2024. The retailer's annual stockholder meeting will be held on Thursday. Recommended Reading Foot Locker to exit several international markets, move headquarters to Florida Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-06-2025
- Business
- Yahoo
Dollar General expands home offering with celebrity brands, designers
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Dollar General has teamed up with multiple celebrities, brands and designers to introduce new home goods products and collections, the discount retailer announced Thursday. The retailer's 'Home Valley' section will feature products from Kathy Ireland's Ki by Kathy Ireland, Betseyville, Beverly Hills Polo Club and Simply Belle by Simply Southern. Ki by Kathy Ireland is launching into over 20,000 stores this summer. Items include throws for $12, sheet sets for $15 and a three-piece comforter set for $35. The retailer plans to add another collection from Kathy Ireland this fall, according to the press release. Dollar General continues to build out its product assortment. With its new home collections, the discount chain wants to reach shoppers seeking affordable, quality items from noteworthy brands 'through a treasure hunt experience,' the company said in a statement. 'Dollar General is committed to offering our customers a constant flow of exciting industry brands that amplify the surprise element of our non-consumable initiative,' Johanna Blankush, senior vice president and general merchandising manager at Dollar General, said in a statement. 'We are dedicated to delivering exceptional value to our customers while staying on top of the latest trends.' Additional products in the company's name-brand home push include seasonal throws from Betseyville, sheets from Beverly Hills Polo Club, Faberware flatware and hydration items from Simply Belle by Simply Southern, Hydraflow and Manna Hydration. The company recently announced that it expanded its Dolly Parton kitchen and housewares collection after a successful release of its first product line with the singer last summer. Dollar General will also debut a Dolly Parton summer entertaining collection and a Christmas collection for the holiday season. Earlier this year, the company said it planned to add roughly 100 new private brand items, with a focus on its Clover Valley grocery brand. Alongside a rollout of new products, Dollar General is reshaping some of its store fleet. In March, the retailer said it would close 96 of its namesake stores and 45 Popshelf stores. The company also planned to convert six Popshelf stores to Dollar General locations, further shrinking the footprint of its higher-end store concept. Dollar General's home goods expansion follows the company's first-quarter results last week. Net sales in Q1 saw a 5.3% bump year over year to $10.4 billion. Net income grew almost 8% to $392 million compared to the year-ago quarter. Continuing its store overhaul, the company said it plans to remodel roughly 20% of its fleet annually. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
Ollie's takeover of Big Lots leases ‘off to a very strong start'
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Ollie's opened 25 new stores in Q1, which was a record for the company. The majority of those openings were former Big Lots locations. Ollie's purchased 40 store leases from the retailer through a bankruptcy auction in February. The former Big Lots locations 'are off to a very strong start,' Ollie's CEO Eric van der Valk said on a call with analysts. 'We appear to be benefiting from the fact that these are warm boxes with a built-in discount shopper customer base, which was our hypothesis going in.' Net sales for the quarter increased 13.4% to $576.8 million, while comparable store sales increased 2.6% year over year. Net income increased 2.6% to $47.6 million. Ollie's new stores are performing well, especially when it comes to the former Big Lots locations. For the quarter, total capital expenditures came in at $27 million, with the majority of that going to the opening of new stores and investments in the retailer's supply chain. 'The Big Lots locations were generally well maintained and have required limited build-out expense to open thus far,' Chief Financial Officer Robert Helm said. 'We did a little bit better than we anticipated because honestly the Big Lots openings have gone a little bit smoother than we had anticipated when we went into the year,' Helm said. Ollie's also benefited from product pipelines that were formerly directed to Big Lots becoming available to the retailer, specifically with consumer packaged goods. Additionally, a 'significant' number of recent retail store closures has created excess inventory. Big Lots' operating model has allowed it to be 'very nimble and selective in what we purchase,' van der Valk said. Meanwhile, Big Lots is in the process of reopening hundreds of locations under new owner Variety Wholesalers. The company filed for Chapter 11 bankruptcy last fall. Editor's note: This story first appeared in the Retail Dive: Operations newsletter. You can sign up for it here. Recommended Reading Joann to exit bankruptcy 'in the coming days' as reorganization plan gets court OK Sign in to access your portfolio
Yahoo
06-06-2025
- Business
- Yahoo
Lululemon to raise prices as progress stalls in the US
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Lululemon is raising prices and prepping for a hit to gross margin as tariffs sweep the industry, executives said on a Thursday earnings call. CFO Meghan Frank said the price increases would be modest, strategic and apply to just a small portion of its assortment. They'll go into effect in the second half of Q2 and into Q3. The retailer largely maintained its guidance for the year, calling for roughly 5% to 7% revenue growth, but lowered earnings per share estimates. Lululemon also said margins would decrease more than planned given the current 30% tariffs on China and 10% on remaining countries. Gross margin is expected to decline by 110 basis points this year, compared to previous guidance for a 60 basis-point decrease. Revenue in the quarter was up 7% to $2.4 billion, with growth in the Americas landing at 3% and international up 19%. Comps in the quarter grew just 1% thanks entirely to international, as comps fell 2% in the Americas. While Needham analyst Tom Nikic called Lululemon's results 'fairly lackluster,' he and others noted that the market's reaction was outsized compared to the retailer's actual performance, especially given that guidance cuts were the result of tariffs. 'That said, the domestic business remains sluggish and international comp growth slowed dramatically in Q1, likely raising questions about the growth [algorithm] from here,' Nikic said in emailed comments. Lululemon store traffic declined in the quarter, especially in the U.S. market, Frank said. CEO Calvin McDonald noted that those shoppers in particular are being cautious about spending right now, making a recovery in the region more difficult. 'We're not seeing the same discerning consumer in Canada as we are seeing in the U.S. in terms of traffic as well as some other metrics that we monitor,' he said. He stressed that Lululemon still gained share across both men and women in the U.S. and said shoppers are responding well to newness in the assortment, including the No Line Align legging and the Daydrift trouser. The leggings will be in all the retailer's stores by September and the Daydrift will be restocked around the same time, potentially leading to more upside ahead. Wells Fargo analysts noted that newness has now returned to historic levels after the retailer last year fell short on choices for U.S. shoppers, but analysts were overall disappointed in the somewhat lengthy timeline for product rollouts and the lack of progress in the U.S. While analysts expected stabilization in the U.S., Wells Fargo said 'we received the opposite,' and Jefferies analysts noted bleakly that the Americas 'keeps getting worse.' 'Despite this decline, [management] continues to prioritize product newness and China expansion over addressing a pullback from core customers and evident traffic declines. We believe this misalignment is concerning,' Jefferies analysts led by Randal Konik said in emailed comments. 'Fixing the Americas should be the top priority given its size (75% mix), yet the focus on newness isn't resonating broadly and the unaddressed rise in competition has led to increased promotions.' Sign in to access your portfolio
