J.C. Penney, Kohl's Post Lower Holiday Sales--2nd Update
January 09 2020 - 10:05AM
Dow Jones News
By Suzanne Kapner
A strong U.S. economy and robust consumer spending wasn't enough
to boost holiday sales at many department stores and mall-based
chains, as Americans continue to shift their purchases online and
to other retailers.
J.C. Penney Co., Kohl's Corp. and Victoria's Secret parent L
Brands Inc. all reported lower sales in the critical months of
November and December. All three companies entered the holiday
season on weak footing, with falling sales as they lost orders to
Amazon.com Inc. as well as traditional rivals such as T.J. Maxx and
Target Corp.
"Our customer data shows that a chunk of clothing spend from
Kohl's customers has migrated to other retailers, most notably to
Target and various off-price players," said Neil Saunders, managing
director of research firm GlobalData Retail. "This is reflective of
the weaker proposition at Kohl's but also underlines the success
Target has had in improving its own offer."
The sales updates came a day after Macy's Inc. reported its
comparable sales fell 0.6% in the holiday period and said it would
close 29 stores. Bed Bath & Beyond Inc. also reported a drop in
comparable sales for the third quarter. Comparable sales generally
include online sales and reflect stores open at least a year.
Not all traditional retailers are struggling. Walmart Inc. and
Target have reported rising sales and store traffic for much of the
past year, as they ramp up online ordering and in-store pickup
services. Off-price chains such as TJX Cos. have also logged
healthy sales.
Warehouse club operator Costco Wholesale Corp. reported
comparable sales jumped 9% in the five weeks ended Jan. 5. The
results include e-commerce sales and international stores. Costco
shares rose 2% Thursday morning and, like shares of Walmart and
Target, are trading near all-time highs.
J.C. Penney's comparable-store sales fell 7.5% during the
nine-week stretch that ended Jan. 4. Excluding appliances and
furniture, categories it exited last year, comparable sales fell
5.3% in the period. The retailer maintained its financial targets
for the fiscal year, which includes January.
Penney's shares, which have hovered around $1 apiece, slipped 4%
in premarket trading.
Chuck Grom, an analyst with Gordon Haskett Research Advisors,
said the continued decline in Penney's sales gives him little hope
the company will be able to turn things around this year.
Kohl's said its comparable sales for November and December
slipped 0.2%, citing weakness in its women's apparel business. It
also warned that profits would be at the low end of its prior
target range. Shares were down 8% to $45.45 premarket.
"We are managing the business with discipline and we expect to
deliver on our earnings guidance for the full year," Chief
Executive Michelle Gass said.
L Brands said comparable sales, which include sales from
company-owned stores in North America open at least a year and
digital sales, fell 3% for the nine weeks ended Jan. 4.
The company, which also owns Pink and Bath & Body Works,
said it now expects fourth-quarter earnings of $1.85 a share. It
had previously guided for earnings of $2.00 a share.
Shares fell 2% in premarket trading.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
January 09, 2020 09:50 ET (14:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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