This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Retailers Navigate Freight Costs, Scarce Inventory and Uncertain Future
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Business > Retailers Navigate Freight Costs, Scarce Inventory and Uncertain Future
Business

Retailers Navigate Freight Costs, Scarce Inventory and Uncertain Future

Editorial Board Published September 21, 2021
Share
Retailers Navigate Freight Costs, Scarce Inventory and Uncertain Future
SHARE

Finance executives in the retail industry continue to face a multitude of challenges as they plan for the fall and the holiday season despite being generally optimistic on their companies’ earnings outlook.

Contents
Newsletter Sign-upCFO JournalAdrian Mitchell, chief financial officer of Macy’s.Michael Mullican, chief financial officer of Academy Sports & Outdoors.

Retailers are grappling with ongoing supply-chain disruptions that are keeping inventory low and often causing delays, forcing companies to pay premiums to accelerate shipments. Deliveries from Vietnam and other Southeast Asian countries have slowed as local governments limit factories’ production capacity due to the Delta variant, potentially resulting in delays and shortages of certain products. Companies say they are experiencing a level of uncertainty not seen since the onset of the pandemic, putting their financial plans in doubt.

Despite these obstacles, U.S. finance chiefs have maintained a positive outlook on future profits and demand for their products, due in part to strong consumer spending. Sales at U.S. retailers climbed 0.7% in August, a rebound from a drop in July, the Commerce Department said.

About 30% of the 108 retailers in the S&P 1500 index revised their annual guidance through Aug. 31, nearly all upward except for discount retailer Dollar Tree Inc., according to data provider FactSet Research Systems Inc. That’s up 25 percentage points from the prior-year period, when 5% of the retailers updated their guidance. About 8% haven’t changed their annual guidance so far this year, while the remaining 62% didn’t provide such a forecast, with some—including Burlington Stores Inc. and Victoria’s Secret & Co.—citing uncertainty as a reason.

Chief financial officers are working to offset some of the hurdles, including ordering inventory earlier than usual, revising long-term contracts with ocean carriers, spending more on airfreight, increasing prices and moving their operations.

Chesapeake, Va.-based Dollar Tree, for example, signed a three-year contract for a dedicated charter vessel to make international shipments and pulled its orders for seasonal inventory forward by 30 days, executives said. The chain, which operated 15,865 stores in the U.S. and Canada as of July 31, said it expects to ship more goods than planned by purchasing transport capacity on the spot market, as the ocean carriers it has contracts with can only move 60% to 65% of the agreed volume for the year, down from the 85% Dollar Tree forecast in May.


Newsletter Sign-up

CFO Journal

The Morning Ledger provides daily news and insights on corporate finance from the CFO Journal team.


In August, Dollar Tree said it cut its forecast for the fiscal year ending in January to earnings per share of $5.40 to $5.60, down from its May forecast of $5.80 to $6.05, driven by higher freight costs. The company booked revenue of $6.34 billion in the quarter ended July 31, up 1% from the prior-year period. Profit was $282.4 million, up 8%. Dollar Tree declined to comment further.

Macy’s Inc., which also operates the Bloomingdale’s and Bluemercury brands, forecasts supply constraints will be its biggest challenge in the fall and winter months, said CFO Adrian Mitchell, who has been in the role since November. However, the increase in Delta cases doesn’t pose a significant threat to the companies’ business because consumers are more experienced in dealing with Covid restrictions now and would likely be able to navigate new ones, he said.

The New York-based retailer has been ordering inventory four to six weeks in advance in an effort to secure products earlier, he said. Macy’s works with its vendors to confirm availability and the expected timing of deliveries when it submits orders as well as throughout the process, Mr. Mitchell said.

The company, which operated 726 stores at the end of the second quarter, declined to say how many weeks in advance it ordered inventory before the pandemic. 

Adrian Mitchell, chief financial officer of Macy’s.

Photo: Macy’s Inc.

“Let’s get ahead of the curve,” Mr. Mitchell said. “Otherwise we will be quite lean.”

Macy’s reported $5.65 billion in revenue during its latest quarter, up 58.7%. Its profit was $345 million, compared with a $431 million net loss a year before.

Sporting-goods retailer Academy Sports & Outdoors Inc. is making long-term plans to  manage supply-chain challenges on the assumption those problems will last till the end of the year or even longer, Finance Chief Michael Mullican said. The Katy, Texas-based chain has agreed to ship bigger volumes over the next two years with its existing ocean freight partners than it had planned, he said. Academy Sports declined to provide more details on those volumes.

In recent weeks, the company has also booked freight further in advance, Mr. Mullican said. “We’re in a position where we’re looking to obtain more inventory than we have,” he said.

Academy’s inventory totaled $1.12 billion for the quarter ended July 31, up 24% from the prior-year period and down 7% from the 2019 period, the company said.

Michael Mullican, chief financial officer of Academy Sports & Outdoors.

Photo: Academy Sports and Outdoors

“We’re about $100 million light of where we want to be,” Mr. Mullican said, adding that customers might have three or four treadmills to choose from in a store instead of six. The company had 259 stores across 16 U.S. states as of July 31.

While some retailers want as much inventory in their stories as they can get, other businesses, typically apparel sellers, are looking to reduce inventory to boost profit margins. Companies including Abercrombie & Fitch Co. , Guess Inc. and Gap Inc. in recent weeks said they are closely monitoring stock levels as they look to market apparel at full price.

Companies clamoring for inventory might run into trouble if products that are seasonal or part of a collection arrive late, potentially resulting in big markdowns, said Janine Stichter, a senior vice president at investment firm Jefferies Financial Group Inc.

“Lead times to get products are so long that if we do see a slowdown in demand, the wheels will already be in motion on securing inventory and retailers won’t be able to hit the brakes fast enough,” Ms. Stichter said.

Write to Mark Maurer at [email protected] and Nina Trentmann at [email protected]

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:Business NewsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article U.S. Stock Futures Bounce After Global Market Selloff U.S. Stock Futures Bounce After Global Market Selloff
Next Article Credit Suisse’s Archegos Disaster Exposes Cracks in Bank Regulation Credit Suisse’s Archegos Disaster Exposes Cracks in Bank Regulation

Editor's Pick

Trump admin slams China’s ‘world energy seize’ on uncommon earths, threatens triple-digit tariffs

Trump admin slams China’s ‘world energy seize’ on uncommon earths, threatens triple-digit tariffs

Each Treasury Secretary Scott Bessent and U.S. Commerce Consultant Jamieson Greer slammed China on Wednesday, Oct. 15, 2025, for what…

By Editorial Board 4 Min Read
‘Deeply alarmed’: Home Democrats ship a letter to Protection Secretary Pete Hegseth
‘Deeply alarmed’: Home Democrats ship a letter to Protection Secretary Pete Hegseth

Ladies veterans in Congress and almost 100 Home Democrats are decrying the…

8 Min Read
Whirlpool CEO says Trump tariffs create ‘stage taking part in area’ for US manufacturing growth
Whirlpool CEO says Trump tariffs create ‘stage taking part in area’ for US manufacturing growth

Fox Enterprise' Lydia Hu joins 'Mornings with Maria' with Whirlpool CEO Marc…

5 Min Read

Oponion

Individuals hate gerrymandering. Texas Republicans don’t care.

Individuals hate gerrymandering. Texas Republicans don’t care.

Survey Says is a weekly sequence rounding up crucial polling…

August 10, 2025

Elon Musk Says He Will Pause Selling Tesla Shares

BusinessTesla CEO says a share buyback…

December 23, 2022

‘The Chosen’ gets viewer funding for third season of Jesus series

“The Chosen,” the super-popular streaming video…

December 22, 2021

Replace: Seaside hazards assertion affecting Bay Space Shorelines till early Thursday morning

Coastal North Bay together with Level…

July 31, 2025

Saratoga metropolis commissioners to guide scenic hike by way of park, protect

Let’s Hike Saratoga The Saratoga Parks…

June 3, 2025

You Might Also Like

FundRelis Restora Brings Accountability to the Wild West of Online Scams
BusinessTrending

FundRelis Restora Brings Accountability to the Wild West of Online Scams

Zurich, Switzerland — In a financial era defined by digital innovation and unregulated trading, a quiet revolution is taking shape inside…

5 Min Read
Russia for Business: Experts Who Help Drive Decisions
BusinessTrending

Russia for Business: Experts Who Help Drive Decisions

Amid sanctions and the restructuring of global supply chains, understanding the logic behind Russia’s actions has become a practical necessity…

4 Min Read
The Quiet Shift in America’s Workforce: Why Side Hustles Are Becoming Essential for Women Over 40
BusinessTrending

The Quiet Shift in America’s Workforce: Why Side Hustles Are Becoming Essential for Women Over 40

Across the nation, a quiet but powerful workforce shift is underway. Increasingly, women over 40 are seeking side hustles to…

4 Min Read
Thales Reinforces its Management in eSIM and IoT Connectivity with a ‘Ready to Use’ Licensed Resolution
Business

Thales Reinforces its Management in eSIM and IoT Connectivity with a ‘Ready to Use’ Licensed Resolution

At a time when billions of linked objects are reshaping industries, Thales has achieved a vital safety certification for its…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?