Consumer
Clothing Retailers Win on Profits, But Sales Tell Another Story
- Clothing sellers largely posted better-than-forecast earnings
- Weak comparable sales suggest the optimism won’t last long
Customers browse through clothing racks in Las Vegas, Nevada.
Photographer: Patrick T. Fallon/AFP/Getty ImagesThis article is for subscribers only.
First-quarter results from apparel retailers including Kohl’s Corp., Gap Inc. and Guess? Inc. all impressed investors this week with better-than-expected earnings and margin improvements. Sales, on the other hand, fell across the board.
The progress on profitability is likely to continue throughout the year as transportation and raw-material costs come down, and as retailers offer fewer discounts now that they’ve whittled down bloated inventories. But macroeconomic uncertainty and increasingly conservative purchasing decisions by shoppers suggests sales growth will be strained for some time.