During the specialty retailers’ latest earnings call Monday (Aug 29), JOANN revealed its curated campaigns and collections approach to big events like back-to-school (BTS) are striking a chord with consumers.
“Make Room is our uniquely curated collection of many of the products students need to decorate their dorm room or apartment as they returned to college. Our Make Room campaign was a valuable strategic play for multiple reasons,” said Rob Will, executive vice president, chief merchandising officer of JOANN, during the earnings call with analysts.
Will notes that through the adoption of strategies like curated marketing campaigns and the integration of social media trends, JOANN has balanced low risk with high reward. This approach appealed to both existing and potential customers, enabling JOANN to market a range of its core products, including textiles, without heavily depending on substantial markdowns.
JOANN attributes its recent earnings report to its “read and react stance” and its use of advanced data analytics to seize distinctive JOANN-specific opportunities, including the early rollout and expansion of its Halloween product line, along with its Make Room initiative.
The increase in crafts mirrors findings from Home Depot, which indicated that although consumers weren’t making big investments in home renovations, they were investing in smaller projects — such as helping a college student add a personal touch to their dorm room.
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Read more: Home Depot: Consumers May Not Be Spending Big, but They’re Still Remodeling
“The state of the homeowner is that they’re very healthy,” said Home Depot’s chief financial officer, Richard McPhail in May. “They have healthy balance sheets. They have healthy incomes. But I do think — and our professional customers tell us they hear this from their customers — there is that shift, even if it’s temporary, from larger projects into smaller ones.”
Joann by the Numbers
Joann’s second-quarter performance showed a 2.1% decline in net sales, year over year (YoY), to $453.8 million. Comparable sales also fell 2%. On a positive note, eCommerce sales rose 3% YoY, contributing 12.1% to overall revenue.
Gross profit was $232 million following GAAP standards, an 8% increase YoY. Gross margin was 51.1% on a GAAP basis, rising 470 basis points YoY.
Selling, general, and administrative expenses increased 4.4% YoY, and Joann recorded a net loss of $73.3 million for the quarter, compared to $56.9 million last year.
