Why Macy’s, Kohl’s and JCPenney All Floundered During the Holidays
Department stores appeared to have ended the holiday season on weak footing as an increasing number of consumers migrate to digital channels versus traditional brick-and-mortar to do their shopping.
This week, nationwide chains Macy’s, Kohl’s and JCPenney were among those to post a decline in sales for the months of November and December. The two months have historically been three of the biggest shopping days of the year: Black Friday, Cyber Monday and Super Saturday (the last Saturday before Christmas).
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While investors were bullish on Macy’s only slight decline in comps, both Kohl’s and JCPenney saw their shares drop in Thursday premarket trading on the heels of disappointing results.
Here, FN rounds up the performances of major retailers as they approach the close of their fiscal year.
JCPenney
The Plano, Texas-based firm reported on Thursday same-store sales that sank 7.5% for the nine-week period ending Jan. 4. Adjusted comps, which excluded the impact of its exit from major appliance and in-store furniture categories, also decreased 5.3%.
What happened: JCPenney has already struggled for several quarters with declining sales, leadership changes and digital competition that spooked investors and pushed its stock below $1, putting it at risk of delisting from the New York Stock Exchange. Over the summer, the chain had hired debt restructuring advisers to buy itself more time for a turnaround, with CEO Jill Soltau leading the push to close underperforming stores and hiring new talent to revive the business.
Q3 results: In the third quarter reported Nov. 15, JCPenney noted adjusted same-store sales that were down 6.6%. (Analysts had expected a drop of 7.7%.) Beyond the narrower-than-expected third-quarter loss, the firm upgraded its full-year outlook, calling for adjusted profits upwards of $475 million, compared with previous forecasts of $440 million to $475 million.
What’s next: JCPenney will report its fourth-quarter earnings results on Feb. 28.
Kohl’s
The Menomonee Falls, Wis.-based company revealed on Thursday that same-store sales for the months of November and December dropped 0.2% from same period in 2018.
What happened: Kohl’s said it saw momentum in e-commerce as well as its active, beauty and children’s departments, coupled with solid performances in its footwear and men’s categories. However, CEO Michelle Gass said in a statement that those positive sales were offset by a weakness in its women’s business, which the firm is “working with speed to address.”
Q3 results: During the third quarter, Kohl’s said on Nov. 20 that its same-store sales, which grew 2.5% in the same period of 2018, increased slightly by 0.4%, versus expected growth of 0.8%. It expected full-year diluted earnings per share in the range of $4.75 to $4.95. (Based on its soft holiday performance, the chain is now predicting full-year diluted EPS at the “low end” of that range.)
What’s next: Kohl’s is scheduled to post fourth-quarter earnings on March 3 and will host an investor day on March 16.
Macy’s
The Cincinnati-based firm announced on Wednesday that it had logged same-store sales for the months of November and December that dropped 0.7% on an owned basis and fell 0.6% on an owned-plus-licensed basis.
What happened: The holiday results showed signs of improvement for Macy’s, which noted positive performances in its digital business and Growth150 stores. “Customers responded to our gifting assortment and marketing strategy, particularly in the 10 days before Christmas,” added Chairman and CEO Jeff Gennette. Macy’s also confirmed today the closure of roughly 30 stores across the country in early 2020. The firm has been investing more resources in its e-commerce mobile app as well as enhancing its website to promote online sales and drive in-store visits.
Q3 results: Ahead of the crucial holiday shopping season, Macy’s on Nov. 21 released its third-quarter earnings report showing its first same-store sales decline in two years. (Comps dipped 3.5%.) The department store also slashed its guidance for the fiscal year.
What’s next: Macy’s will provide an update on its growth plans and three-year strategy at its investor day on Feb. 5.
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