Retail giants, Old Navy, Best Buy, and Dick's Sporting Goods report increased customer visits in 2019.
Retail Giants Report Q3 Results and Foot Traffic Trends
In the latest quarterly reports, several retail giants have shared their financial performances and foot traffic trends.
Gap Inc. reported a 2% net sales decline to $4 billion in the third quarter, attributing the drop to underperforming brands like Old Navy. However, the report noted that Old Navy still possesses the cache necessary to drive visits in the Off-Price sector.
Dick's Sporting Goods saw a positive trend, reporting a net income of $57.6 million for Q3, an increase from its 2018 third-quarter net income of $37.8 million. The retailer also experienced an 11.1% increase in foot traffic from 2017 compared to the same timeframe. In August 2019, Dick's Sporting Goods' visits hit a peak, rising 52.7% above the retailer's baseline. The traffic has increased year over year each month from May through October 2019, indicating a steady growth.
Best Buy announced a revenue goal of $50 billion by 2025. The electronics retailer experienced a 0.3% decrease in foot traffic in 2018 compared to the same baseline. However, in November, Best Buy reported a quarterly revenue increase of 1.8% to $9.76 billion from $9.59 billion in the year-ago period. In August 2019, Best Buy saw a 7.7% increase in visitors compared to the baseline (July 2017 to October 2019).
The company's plan to close numerous brick-and-mortar stores to optimize its physical locations is noted as making "tremendous sense considering the omnichannel focus the brand is taking."
Placer.ai report suggested that increased competition may demand the brand to upgrade the product on offer, or the in-store experience for Old Navy. The report also noted that the ability to convert visitors into buyers may help identify issues with Old Navy, as Old Navy had a 1.5% increase in foot traffic compared to its third-quarter in 2018, but this increase was contrasted by steep visit declines in September and October. Old Navy's visitorship was 19.4% below the baseline in September 2019, more significant than the 10.2% decline in the same month of 2018.
In contrast, Old Navy's visitorship was 15% below the baseline in October 2019, more significant than the 12.3% decline in the same month of 2018. It's worth noting that in 2020, there were no announced closures of Best Buy stores.
Dick's Sporting Goods experienced a 4.5% increase in foot traffic during the first 10 months of 2019 compared to the same timeframe in 2018. The company's steady growth and positive financial performance indicate a successful strategy in the competitive retail market.
Meanwhile, S&P downgraded Gap Inc.'s issuer credit rating and issue-level rating from "BB+" to "BB" in late November, reflecting the company's ongoing challenges in the retail sector.
These reports highlight the dynamic nature of the retail industry, with companies continually adapting to changing consumer behaviours and market conditions.
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