Mother Nature operates on her own schedule, with little regard for corporate earnings.
And she's been busy lately. Unseasonably warm weather and hurricanes, the latter which forced store closures, have dashed apparel and footwear sales forecasts, retail executives have said in recent weeks as they reported their latest quarterly results.
How the mild fall shifted shopping patterns will remain in focus as more retailers share their quarterly earnings. While the third-quarter reporting season is nearly over, Dick's Sporting Goods (DKS) and Burlington Stores (BURL) are due to report Tuesday, and Lands' End (LE) is scheduled to report on Dec. 5th.
Here are some of the weather effects we've seen so far.
Shoppers put off purchases—especially for growing kids.
Hurricanes and warm weather depressed sales growth about 1 percentage point at Gap (GAP) last quarter, CFO Katrina O’Connell said.
The shift, executives said, impacted Gap’s entire portfolio, which includes Gap, Old Navy, Banana Republic and Athleta. But the drop-off was particularly pronounced in the baby and kids' sections at Old Navy.
The brand attracts people looking for bargains, who are more likely to purchase items as the need arises—as are parents, CEO Richard Dickson told analysts.
“You’re not buying a puffer [jacket] in weather that you don’t need it,” Dickson said on a conference call, according to a transcript provided by AlphaSense. “Six months later, your kid could have a different size.”
More people buying sandals meant fewer buying boots.
Sandals continued to sell well into October, Shoe Carnival (SCVL) CEO Mark Worden noted, but that wasn’t enough to make up for poor boot sales.
Comparable-store sales fell year-over-year in the high single-digit range this September and October, Shoe Carnival CFO Patrick Edwards said. About half of that can be attributed to stunted boot sales, Edwards said.
Boots’ performance — coupled with hurricanes — put Shoe Carnival about $10 million behind its sales goal for the latter part of the quarter, Worden said, according to a transcript from AlphaSense.
But he believes boots will have their moment: “Winter is coming,” Worden said on his company's conference call. “We do anticipate growth.” Apparel sales pop when temps drop.
Throughout the quarter, apparel sales fell less than 1% compared to last fall, Target (TGT) Executive Vice President Richard Gomez said. But clothing transactions spiked when cold fronts moved in, Gomez said.
“When we saw the weather break in select markets, we saw a 600 basis point improvement,” Gomez said on his company's conference call, using industry lingo to describe a 6% improvement. “That really bodes well for our apparel assortment as the weather gets colder consistently.”
In October, Columbia Sportswear (COLM) executives cited a wait for colder weather as they scaled back their year-end sales forecast. And at Ross Dress for Less and dd’s Discounts, cooler temperates brought customers back in, according to Barbara Rentler, CEO of the discount stores’ parent company, Ross Stores (ROST).
"As the weather changed by region, we watched the consumer come back," Rentler said on a conference call last week.
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