NEW YORK—Many retailers saw a positive end to their fiscal years. Home and furniture were strong at Dillard’s for the quarter, while appliances and smart home were among the best performers at Best Buy. Home furnishings’ performance at Berkshire Hathaway, however, was weak, though the company’s retailing operations group grew by 9.6 percent.
TJX also experienced a strong performance. “The off-price sector appears to have again taken market share this holiday season, evidenced by TJX’s strong comp store sales of a 6 percent increase,” said Christina Boni, Moody’s vice president-senior credit officer. “The off-price sector is poised to outperform on the top line in 2019 as it continues to be effective in delivering value and convenience to the consumer.”
Home Depot
Coming off a strong 2018, Home Depot is projecting comp growth this year of 5.0 percent. The home improvement store retailer’s fiscal year net earnings jumped 33.5 percent to $9.73 per share. Sales rose 7.2 percent to $108.2 billion. Total company comp for the year increased 5.2 percent, with U.S. comp up 5.4 percent. President and CEO Craig Menear said strategic investments launched in late 2017 paid off in 2018. “We focused on enhancing the interconnected retail experience for our customers, providing localized and innovative product, and delivering best in class productivity,” he said. For the fourth quarter ended Feb. 3, net earnings were negatively impacted by a nonrecurring, pre-tax charge of approximately $247 million. Still, net earnings climbed 27.8 percent to $2.3 billion, or $2.09 per share. Q4 sales were up 10.9 percent to $26.5 billion. Total comp increased 3.2 percent, with U.S. comp up 3.7 percent.—Home Textiles Today
TJX
The parent company of brands including T.J. Maxx, HomeGoods and the new Homesense home furnishings stores in the United States said sales for the quarter ended Feb. 2 increased to $11.13 billion from $10.96 billion from the same period a year ago. Same-store sales were up 6 percent on top of a 4 percent increase in the previous fourth quarter and led by a 7 percent increase at Marmaxx, the division that includes T.J. Maxx and Marshalls stores. HomeGoods, which includes 16 Homesense stores, posted a 5 percent same-store sales gain on top of a 3 percent gain for the fourth quarter a year ago. Net income for the quarter declined 4.1 percent to $841.5 million from $877.3 million and was down a penny to 68 cents on a per-share basis. The value-oriented retailer’s brands and gift assortment “resonated with consumers around the globe this holiday season,” and its apparel and home business were both strong, said President and CEO Ernie Herrman in a statement.—Furniture Today
Berkshire Hathaway
Berkshire Hathaway’s retailing operations posted a 9.6 percent increase in 2018 pre-tax earnings, but gains at its auto dealer and motorcycle equipment and apparel businesses were offset by weaker earnings results in home furnishings. Pre-tax earnings for the group increased by $75 million to $860 million. Berkshires Home furnishing business earnings declined 2.4 percent. Revenues for the retailing group were about $15.6 billion, up 3.6 percent. Home furnishings revenues increased 4.7 percent over the previous year, reflecting increased sales in certain markets and the effect of one new store, the company said in the annual report that accompanied Chairman Warren Buffett’s widely anticipated annual letter to shareholders.—Furniture Today
Dillard’s
Although fourth quarter profit contracted, the sales trend at Dillard’s was positive. The department store retailer said sales were strongest in home and furniture, followed by cosmetics and men’s clothing and accessories. Although merchandise sales slipped 3.2 percent to $1.96 billion, comp rose 2.0 percent. Merchandise sales were up 1.0 percent based on comparable 13-week periods in 2018 and 2019. Net income dropped 46.0 percent to $85.1 million, or $3.22 per share.—Home Textiles Today
Qurate Retail
Qurate Retail Inc., which includes the brands QVC, HSN, zulily and Cornerstone, reported revenue growth of 1 percent to $4.4 billion in Q4 and 2 percent to $14.1 billion in the full year 2018. E-commerce revenue was 62 percent of total revenue in Q4, or $2.7 billion, and 59 percent of total revenue for the full year 2018, or $8.3 billion.
Operating income for the company was up for both Q4 and the year, by 4 percent to $435 million, compared to $420 million in 2017’s Q4, and 2 percent to $14.1 billion, compared to $13.8 billion for 2017, respectively. For the quarter, QVC US’s operating income was down six percent to $346 million from $367 million for 2017’s Q4, while HSN was up to $12 million from -$3 million and zulily up to -$2 million from -$18 million in 2017’s Q4.
QVC US saw revenue increase 3 percent for both Q4 and 2018, while QVC International’s revenue declined 3 percent in the quarter while it increased 4 percent for the year. HSN revenue declined both for the quarter and 2018, 1 percent and 6 percent, respectively. Zulily saw a bump up, however, by 6 percent and 13 percent, respectively, for the quarter and 2018. The Cornerstone brand declined by 4 percent in Q4 and 7 percent for the full year 2018.
“In 2018, we made meaningful progress shaping the future of Qurate Retail, highlighted by the strongest new customer growth at QVC US in its 33-year history and continued gains in digital and mobile engagement,” said Mike George, president and CEO, Qurate Retail, in a release. “Results for the year were led by top-line growth at QVC US and International, excellent performance from zulily, and significantly improved second-half results at HSN as we execute on its turnaround. Margin improvement is a top priority in 2019, as we step up the realization of integration synergies and seek to execute on initiatives to improve product margin and optimize our marketing investments.”
Best Buy
For the fourth quarter ended Feb. 2, the domestic segment of Best Buy saw comparable sales increase 3.0 percent and revenue decrease 3.5 percent versus last year, to $13.50 billion. The consumer electronics retailer attributed the revenue decrease largely to the extra week of revenue totaling approximately $715 million in the fourth quarter of last year, as well as the shuttering of the 257 Best Buy Mobile and 12 large-format stores in the past year. Best Buy said that appliances and smart home were among the largest drivers for comparable sales growth, along with wearables and gaming. In addition, its domestic online revenue of $2.96 billion increased 9.3 percent on a comparable basis, due mostly to higher conversion rates and increased traffic.
“Best Buy continues to generate increasing traction in its multichannel quest, with both brick-and-mortar and online posting impressive performance for both Q4 and FYE 2018,” said Charlie O’Shea, Moody’s lead Best Buy analyst. “The 3 percent increase in comp store sales for Q4 was augmented by online growth of over 9 percent, which needs to be viewed in the context of an over $8 billion online base in a highly penetrated sub-segment of retail as well as the strong physical store performance, with operating margin of 6.6 percent reflecting meaningful year-over-year improvement. The effectiveness of Best Buy’s strategy and strength of its competitive position are validated by its full-year 4.3 percent comp store and 10.5 percent online sales growth.”