The renewed strength of the retail sector was on display again on Thursday after a slew of companies reported sales growth, likely a reflection of an improved economy and higher consumer sentiment.
The string of strong earnings come as nearly all industry sectors invest heavily in e-commerce to better compete with Amazon. Despite the growth, however, investors continue to have concerns over the capital required to support those online platforms, as well as the ability of traditional brick-and-mortar retailers to expand that business.
Women’s apparel chain J. Jill, for example, posted a 9.28 percent increase in total sales to $181 million for the quarter that ended on May 5, higher than the $161 million analysts expected. Net income rose 40 percent $11.3 million, or 26 cents a share.
When asked about how the company’s e-commerce platform would continue to be integrated into the overall sales strategy, company executives declined to comment.
“I don’t have a point of view on that yet,” Chief Financial Officer David Biese told investors. “We think we continue to have a strong platform there. We need to execute better.”
J. Jill’s stock rose 24.4 percent in premarket trading, to $7.71.
At Pittsburgh-based American Eagle, sales climbed 8 percent to $822.9 million, higher than the $811 million analysts had projected. Net income rose 58 percent to $39.9 million, or 22 cents a share. Company executives touted the growth in its lingerie and apparel business Aerie, as well as its e-commerce platform.
“Our digital business has been experiencing unbelievable growth,” Chief Financial Officer Robert Madore told investors. “We continue to improve the operating margins in that business.”
Madore said the e-commerce business represents 29 percent of the company’s total revenue. American Eagle’s stock climbed 3.7 percent to $23.44.
Discount retailers on Thursday also reported sales growth, but failed to meet expectations set by Wall Street.
Dollar General revenue climbed 9 percent to $6.1 billion. Sales at stores open at least a year increased 2.1 percent at the Goodlettsville, Tenn.-based company, less than the 3.1 percent analysts had expected.
The stock dropped 6.61 percent to $90.14.
Companies continue to cite inclement weather over the past several months as a drag on sales.
“Our teams worked hard to deliver top-line sales and bottom-line earnings results within our range of guidance, despite headwinds related to increasing freight costs, colder-than-normal spring weather in many parts of the country and an earlier Easter holiday,” Dollar Tree Chief Executive Officer Gary Philbin said in a statement.
The Chesapeake, Va.-based budget retailer reported a 5 percent increase in total sales to $5.5 billion. Net income fell 20 percent to $160.5 million, or 67 cents a share. Dollar Tree’s stock dropped 11 percent to $85.97.
