CVS split, Canada Goose losses and a Panem perfume: the week in retail

Canada Goose's net loss widened to CA$26.3 million in the second quarter, up from CA$17.4 million a year earlier, even as revenue grew nearly 6% year over year to CA$274 million ($195 million at press time). The outerwear company reported the results Thursday. The takeaway: growth is returning, but traffic and costs are still working against it.

What happened at Canada Goose?

DTC revenue rose 2.7% and wholesale revenue grew 4.6% in the quarter. DTC comparable sales, however, fell 7.5%, and CEO Dani Reiss pointed to persistent weakness in stores.

"Softer store traffic [continues] to be a headwind," Reiss said on a call with analysts. "When customers came through the door, the response was strong. Conversion improved and average revenue per unit and units per transaction increased. We are encouraged by these results and are confident in our ability to build on that momentum and to return to positive comp sales growth."

Costs climbed alongside sales. Operating loss reached CA$21.6 million, from CA$17.6 million in the year-ago period, while SG&A expenses rose to CA$204.5 million from CA$183.3 million. In plain words: the brand converts better when shoppers show up, but fewer of them are showing up.

Who bought Coldwater Creek?

Nexus Capital Management completed its acquisition of CW Holdings, parent of direct-to-consumer women's apparel and lifestyle brands Coldwater Creek and Soft Surroundings, according to a Monday press release. Both brands serve women aged 45 and older through e-commerce sites and catalogs.

"Coldwater Creek and Soft Surroundings are brands with decades of heritage and customers who have stayed with them for years," Coldwater CEO David Walde said in a statement. "Nexus shares our belief in what makes these brands special, and with their support we will continue investing in our product, the experience we deliver for our customers and the ways we reach new ones."

Nexus' portfolio includes Dollar Shave Club, Hostess Brands, FTD, Toms and 99 Cents Only Stores. The deal adds two catalog-driven heritage brands to a buyer known for consumer names.

Why is there a Hunger Games fragrance?

Fragrance is drawing mainstream retailers in. Gap and Victoria's Secret increasingly see opportunity in a global market that could approach $90 billion by 2033, according to Grand View Research. Fruity scents are currently trendy, according to Vogue.

Scentbird, a fragrance-sample subscription company, and Drift, known for car and home fresheners, this week took an unusual creative direction: a scent based on Panem, the setting of the Hunger Games franchise. Released Thursday ahead of the theatrical debut of "The Hunger Games: Sunrise on the Reaping," the line includes an eau de parfum, a home scent diffuser and a car freshener, "bringing the world of Panem to life" through fragrance.

The partnership set aside Panem's ritualized state-sanctioned child murder in favor of its "breathtaking landscape and enduring sense of hope." Notes include wild berries, apple tree, golden daisy, butterfly bush and meadow moss. In short: dystopia, but make it fruity.

How big was E.l.f.'s quarter?

E.l.f. Beauty's Q2 net sales jumped 51% year over year to $520.8 million, and net income grew from just under $3 million a year ago to roughly $30 million. The company raised its fiscal-year outlook and stunned some industry analysts with the results.

CEO Tarang Amin credited not only the lower price positioning of some of its brands but also the company's innovation pipeline. The takeaway: value pricing plus new products is still compounding for E.l.f.

Will CVS' pharmacy split mean a better retail business?

CVS Health announced earlier this week that it intends to separate its healthcare business from its retail pharmacies, raising questions about what the split means for the retail segment, which analysts say has been largely ignored in favor of healthcare.

"Of course, the decision is more about how investor value can be maximized rather than because of a deep desire to give retail the attention it needs and deserves," GlobalData Managing Director Neil Saunders wrote in emailed comments Wednesday. "Even so, if the split does happen, retail will have to stand on its own two feet and that means sharper execution and much more innovation. It will, basically, force retail into making decisions and investments it has traditionally put off."

In CVS Health's third quarter, reported Wednesday, front-of-store sales were roughly flat at $5.2 billion. That metric barely dents the combined business today. Post-split, the new CVS Pharmacy will lose built-in operational efficiencies and that flat number will matter far more.

"The struggles of Walgreens and Rite Aid underscore the difficult economics facing standalone pharmacy chains without the financial cushion of a corporate umbrella that includes an insurer and [pharmacy benefits manager]," Emarketer senior analyst Rajiv Leventhal said in emailed comments.

Saunders said growing consumer interest in health and wellness gives the new CVS Pharmacy room to build a robust retail offering, but success will require investment in pricing and customer service. "These things could be remedied with more focus. But there should be no illusion here. The consumer entity is the weaker part, and it will start life as a stand-alone business on the back foot," Saunders said. "Nor will independence, in and of itself, fix the problems. CVS still needs to develop a more compelling retail proposition that gives consumers reasons to visit beyond collecting prescriptions or making the odd necessity purchase."