Macy's and Kohl's Slow Sales Slump, but Investors Still Spooked -- Update
August 10 2017 - 11:30AM
Dow Jones News
By Suzanne Kapner and Ezequiel Minaya
Macy's Inc. and Kohl's Corp. reported another quarter of
shrinking sales that spooked investors, even though the latest
declines weren't as deep as they have been in recent quarters.
Kohl's executives pointed to signs of improved demand and
shopper traffic in summer months and Macy's executives said their
store restructuring and inventory reduction put them on track to
reach their goals for the year.
Still, the results weren't enough for investors who have soured
on the sector. Shares of Macy's fell 8% and Kohl's dropped 7%
Thursday morning. Smaller department store chain Dillard's Inc.,
which Thursday surprised analysts by swinging to a loss, tumbled
13%.
Macy's same-store sales -- a metric that tracks sales at
established locations that haven't recently opened or closed --
fell 2.8% in the second quarter, better than the 5.2% retreat in
the first quarter.
"I'm encouraged by the second quarter and we're on track for the
year," Macy's CEO Jeffrey Gennette said on a conference call. "But
I also know that we operate in an environment of intense and
destructive competition, and that our customer has more shopping
options than ever."
Kohl's same-store sales retreated 0.4% in its latest quarter,
less than the 2.7% decline the previous quarter.
"The improvement in our sales trend was driven entirely by an
improvement in traffic," Kohl's Chief Executive Kevin Mansell said
on a conference call. A notable change came in July, when traffic
turned positive compared with the same month last year.
Kohl's was able to lure new shoppers with the addition of the
Under Armor brand in its stores. That helped its activewear
business post a roughly 15% sales increase in the period compared
with a year ago.
Mr. Mansell said Kohl's also sold more goods at full price,
while less inventory resulted in fewer promotions to clear unsold
goods.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Ezequiel
Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
August 10, 2017 11:15 ET (15:15 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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