👗 Bargains beat… As budgets get pinched, budget buys are in: TJ Maxx and HomeGoods parent TJX topped expectations last week, raising its annual sales guidance as more Americans treasure-hunted for $10 Levi’s and discount Michael Kors. Rival Ross had a strong Q3 after sales jumped 5% to $4.9B. Burlington shares soared 20% yesterday after the discount-jacket giant dropped a big beat and noted a “solid” start to the month.
👖Teen spirit… is Fitch again. Abercrombie raised its annual revenue guidance yesterday after Q3 sales jumped 20% to $1B+. The (not-so-distressed) denim icon has found success even as overall clothing spend slips. Rival Urban Outfitters notched a record $1.3B in sales thanks to strong demand for its Nuuly rental service and Free People line. Aerie owner American Eagle also had a record $1.3B in sales, but its stock sank 16% after an underwhelming holiday forecast.
🛍️ Department drop-off… Macy’s beat expectations as trimmer inventory and fatter margins helped offset a 7% quarterly sales dip. The department store hopes having an extra weekend to shop before Christmas this year will boost holiday #s. Rivals Nordstrom and Kohl’s also reported a slump in sales, even as they cleared out inventory. Kohl’s scaled back full-year sales expectations.
Looking forward → Retail bottom lines are benefiting as once bloated inventory levels (finally) normalize. Now stores are prepping for Black Friday, with over a third of Americans planning to shop this week. While overall holiday spending is expected to hit a record of up to $966B, it’s the slowest pace of growth in five years.