Sales are growing. Why do the earnings releases feel like a damage report? This is Fashion Business Daily. Today: retail results, shrinking client lists, and whether a consumer-built product idea can actually make it to the rack. Start with JD Sports—because the gap between the sales headline and the profit line is where this morning gets interesting. From Stockopedia:
“Our Group organic sales were -0.7% for the half, a resilient performance against a challenging backdrop of consumer cost-of-living pressures, footwear product cycle headwinds and a highly promotional market. We remained focused on ‘controlling the controllables’ – progressing our strategy at pace while maintaining tight cost and capital discipline.
JD Sports' sales were down just 0.7%, and people will call that sturdy. Then look at adjusted profit before tax: down 19.7%. Footwear cooled off, and the spreadsheet felt it right away. Company-reported gross margin fell 20 basis points to 46.8%, while operating margin dropped 120 basis points to 5.0%. That points to a much sharper cost-and-profit problem than the sales line suggests. Apparel and accessories now make up 36% of group sales, which helps diversify the mix. But you still need footwear people actually want; a more elaborate product mix can't manufacture a sneaker moment. Free cash flow did improve, from negative £68 million to negative £18 million, so the cash discipline is real. But unchanged FY27 guidance asks investors to swallow a lot when management itself cites promotions, cost-of-living pressure, and a weak footwear cycle. Here's Earnings Whispers:
“Fiscal 2026 was a transformative year for Stitch Fix. We closed the year as a significantly healthier business, with a strengthened operating foundation, along with a reimagined client experience and more compelling assortment,” said Matt Baer, CEO, Stitch Fix. “Full-year revenue grew 6.4% year-over-year and we continued to gain share in the U.S. apparel, footwear and accessories market.
Stitch Fix reported fiscal 2026 revenue up 6.4% to $1.348 billion. But active clients fell 1.4% to 2.277 million in the fourth quarter, while revenue per client rose 7.8% to $592—so growth is coming from a smaller base spending more. A styling business can squeeze more out of the people still opening the box. But the box has to be good enough that more people want one; that client count is still heading the wrong way. The fiscal 2027 outlook matters more than any victory lap: management is guiding revenue flat to down and lower EBITDA while spending on advertising and AI. Gross margin was flat at 43.6% this quarter; the investment case needs client growth, not just a pricier reacquisition effort. From Fibre2Fashion:
Myer Holdings reported FY26 total sales of $4.09 billion, up 11.3 per cent, while underlying net profit after tax fell 2.9 per cent to $42.5 million. A $279.6 million impairment resulted in a statutory loss. The Australian retailer said early FY27 comparable sales were broadly flat and is targeting costs at about 29 per cent of sales.
Myer's company-reported sales rose 11.3% to A$4.09 billion, but comparable sales managed just 0.7% and pro forma growth was 0.3%. Strip out the integration effect, and it's a very different earnings release. And early FY27 comps are broadly flat. So the department-store machine got bigger, sure—but shoppers aren't exactly stampeding back for the edit. Underlying net profit fell 2.9% to A$42.5 million, then an A$279.6 million impairment pushed Myer to a statutory loss. We just heard it from JD and Stitch Fix: the revenue story is holding together while the profit picture gets much less flattering. The cost target is about 29% of sales. Fine—watch the costs. But if the merchandise and curation aren't giving people a reason to browse, a tighter expense line won't make a department store feel exciting. Here's BusinessDesk:
Group sales up +6.5% to $1,053.0 million. • Gross margin increased +1.2% of sales to 57.7%. • Underlying operating expenses(1) up +4.4% to $565.2 million. • Underlying EBITDA(1) $42.0 million, up +137.7% year-on-year (“YOY”). • Statutory NPAT loss -$414.4 million, inclusive of a $394m post tax impairment expense.
KMD grew sales 6.5% to NZ$1.053 billion and lifted gross margin to 57.7%. But the statutory loss is NZ$414.4 million, nearly all tied to a NZ$394 million post-tax impairment—so separate the write-down from the underlying NZ$9 million loss. Ozmosis sales fell 12.1%, and KMD says product assortment was the problem. Well, yes. A multi-brand surf-and-street store can't spreadsheet its way out of a weak floor. The early FY27 split is revealing: Kathmandu same-store sales are up 7.4%, Rip Curl brand stores are up 4%, and Ozmosis is down sharply. Management guides EBITDA to NZ$52 million to NZ$55 million, but after skipping the final dividend, I'd want that improvement to show up in cash as well as guidance. Rip Curl is leaning on its first Next Gen product deliveries for the Australian peak season. Fine—then those pieces need to be good enough that people buy them at full price, not just good enough to decorate a turnaround deck. This one's from The Economic Times:
Demoverse secured six hundred thousand dollars in pre-seed funding led by Lumikai. This platform uses artificial intelligence to let consumers shape product concepts before production. Brands can now predict demand and reduce excess inventory, especially in fashion. Consumers whose ideas are used will earn royalties when products are commercialised.
$600,000 is tiny, but Demoverse has a sharper proposition than most fashion-AI decks: let people shape the product before the factory gets the order, then pay royalties if their idea ships. Lumikai put $500,000 of that $600,000 round through its Pixels program. The commercial test is whether brand merchandisers see community votes as a useful demand signal—or just a very elegant focus group. Put provenance in the brief, too. If shoppers are proposing the jacket, they can ask for recycled fiber, better trims, fewer units—before somebody tries to sell the sustainability story on a hang tag. Now, will a cautious buying team actually greenlight the weird good idea? Different problem. After the JD, Stitch Fix, Myer, and KMD numbers, you can see why the inventory angle matters. Demoverse still has to show that votes translate into sell-through; otherwise it's participation theater with a royalty clause. If your team needs a daily briefing on your own fashion competitors, market, or beat, Lantern makes private versions of shows like this for your whole team. Learn more at lantern podcasts dot com slash briefings, with a 14-day free trial.
Links to every story are in the show notes, so take a closer look at whatever caught your attention. Thanks for listening, and we'll be back tomorrow with more. That's Fashion Business Daily for today. This is a Lantern Podcast.