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Black Friday may have undergone a ‘fundamental change’ due to the coronavirus pandemic

“We’re seeing a fundamental change in the promotional calendar,” former Saks CEO Steve Sadove told CNBC….

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The coronavirus pandemic caused retailers to shift their approach to the holiday shopping season, opening the promotional window for Black Friday deals much earlier than years past. And some in the retail industry believe the adaptions may become standard practice going forward.

“We’re seeing a fundamental change in the promotional calendar,” Steve Sadove, former chairman and CEO of Saks, said Friday on CNBC’s “Squawk Box.” “I think the retailers have done a brilliant job extending the season, and that will play out as we go into next year,” he added.

In an environment where the pandemic has led more and more consumers to online channels, the earlier start to the holiday should prove beneficial in avoiding significant shipping delays for orders that are placed after the first couple weeks of December, Sadove also said.

The idea of lengthening Black Friday is not new for retailers, according to former Walmart U.S. President and CEO Bill Simon. “They’ve been trying to do that for years and haven’t had any success, and this might just be the year they pull it off,” Simon said in a “Squawk Box” interview alongside Sadove.

For big-box retailers, particularly his former company, Walmart, and Target, Simon said the willingness to embrace an extended Black Friday period likely depends on their ability to succeed in e-commerce while relying less on their physical stores.

“They’re moving from a channel of dominance to a channel where they’re a distant second” behind Amazon, Simon said. “They’re going to have to catch up very quickly, or they’re going to try to change the calendar back to be more physical and more Black Friday because they’re not going to like the result.”

Sadove, who led Saks from 2007 to 2013, said he believes it will be “a combination of both” in the years ahead. One reason for that, he said, is the strong sales that have been experienced so far this fall.

“I think everyone is benefiting from the early burst. You saw this big volume increase year on year and it’s continuing and I think that’s going to lead to bigger numbers for the holiday season,” he said. “I think the retailers are going to try and play it both ways, where they continue the early promotions. And then with a big burst coming in at the Black Friday-Cyber Monday period.”

Whatever the path forward for Black Friday deals, Simon said he has concerns about the sustainability of them being heavily targeted toward e-commerce, because retailers need people to buy products that aren’t just on sale. Online shoppers may just be cherry-picking deals, he said.

“If you just sell the deals, you’re going to lose money. It’s just not set up that way. You’ve got to sell the wrapping paper and the Christmas lights and the candy canes and everything else that goes with it or you’re just not going to make it,” said Simon, who oversaw Walmart U.S. from 2010 to 2014.

Sadove said that challenge could be mitigated by online purchases being picked up at physical retail locations. “That’s where you do get some of the margin enhancement,” he said. “Online shopping, especially with low-end price points, is very difficult. When you get the buy-online, pickup-in-store — and the big boxes have done it well — that really does win.”

Follow CNBC’s updates on Black Friday here.

Source: https://www.cnbc.com/2020/11/27/holiday-shopping-may-undergo-a-fundamental-change-due-t.html

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Source: https://www.cnbc.com/earnings/

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Stitch Fix shares surge as online styling service reports surprise profit

Stitch Fix shares jumped after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

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The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Stitch Fix shares jumped 14% in extended trading Tuesday after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Consumers have been splurging on new outfits in recent months, as many head back to school and return to social gatherings. Some have also citied the need for new clothes after either gaining or losing weight during the Covid pandemic.

Here’s how Stitch Fix did compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 19 cents vs. a loss of 13 cents expected
  • Revenue: $571.2 million vs. $548 million expected

Net income attributable to shareholders was $28 million, or 19 cents per share, in the latest period. A year ago, it posted a net loss of $44.5 million, or 44 cents a share. Analysts had been looking for the company to book a loss of 13 cents per share.

Revenue grew to $571.2 million from $443.4 million a year earlier. That was better than analysts’ expectations for $548 million.

Stitch Fix reported nearly 4.2 million active clients, up 18% from a year earlier. The company said net revenue per active client was $505, surpassing the $500 threshold for the first time ever. Customers have been purchasing more items to keep at home, Stitch Fix said, as they have more brands and price points to choose from.

Stitch Fix defines active clients as people who either ordered a “Fix” subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.

The company also said it had its lowest ever churn rate at the end of the period, meaning its customers are sticking around.

Last month, Stitch Fix finally opened up its direct-buy option, which is now known as “Freestyle,” to the public. This allows people to shop Stitch Fix for individual items of clothing, without needing to sign up for a subscription.

CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market in the year ahead. The company’s next initiative will be to market and raise broader awareness around the offering, she said. Stitch Fix is preparing to roll out a national advertising campaign on the debut.

Early indications are that “Freestyle” is meaningfully accretive to the company’s revenue per active client metric, Spaulding told analysts on a conference call.

“Clients have agency, flexibility and choice while also experiencing a highly personalized shopping experience,” Spaulding said.

For its fiscal first quarter, Stitch Fix said it sees sales in a range of $560 million to $575 million. That’s below analysts’ expectations for $588 million.

For the upcoming fiscal year, Stitch Fix anticipates sales rising 15% or more from the prior year. Analysts polled by Refinitiv had been looking for an 18% increase.

While the entire retail industry is working through supply chain complications, Stitch Fix said it is seeing a small impact, but nothing that will hurt the business in the fall and winter months. The company said it is less reliant on Vietnam, where manufacturing has largely come to a standstill due to ongoing pandemic lockdowns in the region.

As of Tuesday’s market close, Stitch Fix shares have fallen nearly 39% this year. The company has a market cap of $3.8 billion.

Find the full press release from Stitch Fix here.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Source: https://www.cnbc.com/2021/09/21/stitch-fix-sfix-q4-2021-earnings.html

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© 2021 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

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Data also provided by Reuters

Source: https://www.cnbc.com/earnings/

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