Today in retail, Chewy’s stock drops to a two-year low despite record spending levels, while Five Below plans growth. Plus, Avarda embraces open banking, Lululemon adds tennis and golf gear, and Restoration Hardware will open “selling spaces.”
Chewy Struggles to Turn Record Spending Into Profits, Investors Push Stock to 2-Year Low
Online pet supply retailer Chewy’s fourth-quarter earnings results were, on the one hand, filled with delectable achievements and positive metrics related to sales, spending, subscriptions and new commercial ventures. On the other hand, Chewy was unable to mask the reality that the fast-growing company delivered a $63 million quarterly loss. Chewy’s stock has dropped more than 60% from a peak of $120 to overnight, extended hours trades below $45 per share — a level not seen since the pandemic lows two years ago.
Five Below Unveils Threefold Growth Plan
Five Below will triple its store count over the next eight years, the kid-friendly discount chain said during its Investors Day presentation. President and CEO Joel Anderson told investors the company will add 1,000 stores in the U.S., including 375 to 400 slated to open over the next two fiscal years. The company is calling this its “Triple-Double” vision, a plan that aims to have the company grow to more than 3,500 stores by the end of fiscal 2030, and to double its sales — and more than double its earnings per share (EPS) — by the end of fiscal 2025.
Avarda CEO Says Open Banking Will Increase Retailer Conversion Rates
The adoption of deferred payment options across countries in the Nordic region has contributed to the growth of global firms like Swedish buy now, pay later (BNPL) giant Klarna, which recorded a 42% increase in global transaction volume and a 38% jump in global net operating income in 2021. Avarda is also well-known in the region for its white-label checkout solutions — Pay-by-bank and Purchase Now, Pay Later options — used by multiple merchants in Sweden, Norway, Denmark, Finland, Estonia, Latvia, Lithuania and Poland where the firm has operations.
Lululemon Serves up Tennis and Golf Gear in Head-to-Head Match vs Nike and Adidas
Athletic women and yoga apparel once stood as the main page mainstay on Lululemon’s website, but now you’ll find a pair of tennis players, serving, volleying, modeling and mostly taunting the competition. While acknowledging that the majority of the company’s growth and revenue will continue to come from its core yoga and athletic training apparel for women and men, the Vancouver-based retailer made no secret about its plans to grow its product pipeline by expanding into more activities and taking on long-standing rivals in new sports.
Restoration Hardware Closes Record Year, Looks to ‘Selling Spaces’
Luxury furniture and home goods retailer Restoration Hardware posted its second consecutive year of record results for the fourth-quarter and full year. Chairman and CEO Gary Friedman wrote in a letter to shareholders that the company plans to open “immersive Design Galleries” in each major market, generating revenues of $20 to $25 billion worldwide, part of a strategy to “move the brand beyond curating and selling product to conceptualizing and selling spaces.”
Rent-A-Center’s Acima Unit Names New Management
Furniture, appliance and electronics rental chain Rent-A-Center has announced a change in management for its virtual lease-to-own operation Acima, one month after reporting disappointing Q4 results, naming Aaron Allred executive vice president in charge of Acima, the company he founded. Allred has continued working for Rent-A-Center since the chain acquired Acima in February 2021 and is a “significant shareholder.”