<\/p>\n
\n\tIt\u2019s been a busy couple of weeks.<\/p>\n
\n\tThe nation moved quickly from preparing for the midterm elections to marveling at the blue wave that overtook Congress to worrying over the popping of any AI bubble.<\/p>\n
\n\tBut in between it all, there was still time for a little retail.<\/p>\n
\n\tAnd when the chief executive officers of a core group of fashion brands weighed in with quarterly results, politics and AI were not exactly in the discussions with analysts.<\/p>\n
\n\tBut the same issues driving the politics of the moment \u2014 affordability and the economic outlook \u2014 were front and center.<\/p>\n
\n\t\u201cFor the U.S., there\u2019s clearly winners and losers and you can see that in the performance,\u201d said Laurent Vasilescu, an analyst at BNP Paribas, of fashion brands. \u201cIt seems like that the higher-end consumer seems to be still powering through. The U.S. still seems to be on the stronger side of things. Anecdotally, people would point to the credit card companies like Amex reporting good numbers.\u201d<\/p>\n
\n\tFashion CEOs are increasingly grabbing hold of what they can reach and not fretting overly about the broader world.<\/p>\n
\n\t\u201cRegardless of the macro, we\u2019re running our play,\u201d Ralph Lauren Corp. CEO Patrice Louvet told analysts. \u201cWe\u2019ve got an eye on the long term because we want to make sure we\u2019re continuing to build this brand in the right way for long-term success. Because we have both the diversity of growth drivers and the flexibility to pivot and take advantage of clear opportunities for Ralph Lauren in the marketplace, that\u2019s where our confidence comes moving forward.\u201d<\/p>\n
\n\tRalph Lauren had another \u201cbeat and raise\u201d second quarter, when sales were up 9 percent to $2.2 billion, although some new caution on the business in Europe seemed to spook investors.<\/p>\n
\n\tAt Coach parent Tapestry Inc., where fiscal first-quarter sales rose 12 percent to $1.9 billion, the sentiment was much the same.<\/p>\n
\n\t\u201cIn the U.S., while we see a discerning consumer, they\u2019re choosing our category and our brand, and our value proposition has never been stronger,\u201d said CEO Joanne Crevoiserat. \u201cIndustry forecasts for holiday in the U.S. are calling for midsingle-digit growth. There\u2019s a constructive backdrop overall as we head to holiday. At Coach, we\u2019re looking at midsingle-digit growth expectations for both the quarter and for the year in North America. We\u2019re ready to compete and win.\u201d<\/p>\n
\n\tRalph Lauren and Tapestry have been proving that they\u2019re ready to compete and win for more than a decade, pushing their stock market valuations over $20 billion each as they cut away messy distribution, elevated their brands and funneled more money to marketing.<\/p>\n
\n\tWhile those two have forged the path forward, the question has become whether other brands can follow. Michael Kors-parent Capri Holdings and Under Armour Inc. are trying to pursue similar strategies.<\/p>\n
\n\t\u201cWe know there\u2019s market share to be regained and taken,\u201d said John Idol, CEO of Capri, on a call with analysts. \u201cThe industry and, in particular, some of the other luxury European luxury brands, are having a bit of a struggle right now. And we actually think this is a super time for us to be able to resonate with consumers who are being a bit more choiceful. We can see that with some other brands around the world who are enjoying the fruits of that success.\u201d<\/p>\n
\n\tCapri Holdings\u2019 quarterly sales fell 5.5 percent to $809 million and analysts are watching for a turn. Meanwhile, Under Armour is still in deep reset. Its sales fell 7 percent to $1.2 billion last quarter.<\/p>\n
\n\t\u201cOur focus at Under Armour is to build a stronger brand through compelling products and more consistent execution,\u201d said Kevin Plank, founder and CEO of Under Armour. \u201cWe remain focused on revenue quality and profitability, putting our resources behind innovative products, aspirational storytelling and elite execution while maintaining expense discipline.\u201d<\/p>\n
\n\tBlake Anderson, an analyst at Jefferies, said \u201cthe million-dollar question\u201d is whether fashion retailers will be able to hold the line on pricing over the longer run.<\/p>\n
\n\t\u201cI think that companies have generally said that there will be some promotion and that they want to still maintain or grow market share, but they\u2019re not going to reduce prices or discount just for the sake of growing,\u201d he said.<\/p>\n
\n\t\u201cWe\u2019ve been in more of an inflationary environment for apparel and footwear this past year,\u201d he said. \u201cPart of that is due to price increases due to tariffs and passing through. But the question is always going to be, How much pricing power do these brands have and is it sticky? Does it sustain? There\u2019s a lot of question, does this continue into next year or do we see lower pricing as we have to lap the higher pricing from this year? It really will depend on the brand and the company and really the momentum they have and the investments they\u2019re making.\u201d<\/p>\n
#Fashion #CEOs #Focus #Growth #Economic #Challenges<\/p>\n","protected":false},"excerpt":{"rendered":"
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