Holiday Sales Rebound at Macy's and J.C. Penney --Update
January 04 2018 - 10:43AM
Dow Jones News
By Suzanne Kapner and Allison Prang
A healthy economy and strong consumer spending gave a boost to
Macy's Inc. and J.C. Penney Co., which reported sales growth for
the critical holiday months.
Macy's said same-store sales rose 1% in November and December
from a year ago, while Penney's increased 3.4%. The results were an
improvement from a year ago when both chains reported declines. The
big mall anchors are the first major retailers to give investors a
readout on the holiday season.
Analysts and economists have predicted that low unemployment and
rising wages gave consumers at all income levels the confidence to
spend this holiday season. Retailers had their best holiday sales
since 2011, according to Mastercard SpendingPulse, which tracks all
forms of payments both in stores and online.
Both Macy's and Penney have struggled with falling sales as
shoppers make fewer trips to malls and do more of their spending on
smartphones. They have responded by closing weaker locations and
ramping up investments in e-commerce.
"Consumers were ready to spend this season, and we delivered
with solid execution," said Macy's CEO Jeff Gennette.
On Thursday, Macy's said it would close 11 stores early this
year, which are part of about 100 closures the company had
announced in August 2016. It will also be making staff changes that
will involve downsizing or increasing staff in different
stores.
After weak sales last holiday season, Macy's announced plans to
cut 10,000 jobs and Penney unveiled plans to close 138 stores and
offer buyouts to 6,000 workers.
On Thursday, Macy's increased its adjusted earnings guidance for
fiscal year 2017 to be between $3.59 and $3.69 a share given the
effect tax reform will have on the company's yearly tax rate. The
retailer said it expects total sales during the 2017 fiscal year to
fall between 3.6% and 3.9%.
Penney said it was reaffirming its previous financial targets,
which include a forecast of fiscal 2017 comparable sales that will
be flat to down 1% from a year ago.
After rallying in recent weeks, the shares of Macy's and Penney
slipped in Thursday morning trading. Macy's shares fell 2.61% to
$24.64, while Penney's shares dropped 3.5% to $3.57.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Allison
Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
January 04, 2018 10:28 ET (15:28 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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