Strong economy does little to lift department store sales

  • Strong economy does little to lift department store sales

Strong economy does little to lift department store sales

Shares of Macy's plummeted almost 18 percent Thursday, suffering its worst one-day decline. Kohl's shares were down 5.4 percent in premarket trading after reporting anemic comparable sales growth of 1.2 percent during the final two months of 2018, from 6.9 percent a year earlier.

We delivered our second consecutive year of positive holiday comparable sales, driven largely by the traction of our strategic initiatives: Backstage, Vendor Direct, Store Pickup, Loyalty and Growth50.

All of the retailer's core categories grew during the holiday season, with toys, baby and seasonal gift items being the strongest.

Elsewhere in the retail sector, Kohl's said comparable sales rose 1.2 percent in November and December, drastically lower than last holiday season when the company saw comparable sales growth of almost 7 percent. Chairman and CEO Jeff Gennette said in a statement that holiday sales started out strong during Black Friday and Cyber Week, but softened in mid-December before picking up steam the week of Christmas.

Target, Nordstrom and troubled J.C. Penney fell in sympathy. "There is a lot of uncertainty out there". (TGT.N) was down almost 4 percent even after the retailer posted relatively strong holiday sales growth of almost 6 percent. Saunders said investors are also anxious that a recovery among traditional stores like Macy's is losing momentum, raising concerns that they might have to ramp up investments even more to increase sales.

Online sellers are relentlessly growing their share of retail sales. Its comparable sales, including licensed departments, rose 1.1 percent during November and December.

A recession could hit many department stores particularly hard, some industry watchers said.

Consensus estimates are calling for $4.23 in EPS and $25.01 billion in revenue for the coming year. It expects same-store sales growth of about 5 percent for the fourth quarter through January. That is key to Target's campaign to hold online retailers like Amazon at bay, particularly during the competitive holiday season, because shoppers can dodge shipping fees. Guidance for same-store sales also declined a bit, with the company now expecting a rise of roughly 2 percent in fiscal 2018, compared to its prior forecast for an increase of between 2.3 to 2.5 percent. Comparable online sales climbed 29 percent.

The company still expects full-year adjusted earnings in a range of $5.30 to $5.50 per share. Analysts polled by FactSet foresee $5.39 per share.

The retailer on Thursday lowered its annual profit guidance to between $3.95 and $4 a share, down from between $4.10 and $4.30 provided on November 14.