Return to Typical Unsatisfactory for Department Stores
< img src="https://images.wsj.net/im-341398/social" class="ff-og-image-inserted"/ > Kohl’s and Macy’s are getting almost back to where they were prior to the pandemic struck. Regrettably for them, rivals are currently well ahead of that.
In the quarter ended Might 1, Kohl’s and Macy’s saw net sales rebound 70% and 56%, respectively, compared with a year previously, as shoppers sought to refresh their stagnant closets. Dressier categories, including even tailored clothing, are picking up, Macy’s noted in its profits contact Tuesday.
The bounceback was mostly to be anticipated after a disappointing similar quarter in 2015, when stores needed to close due to Covid-19 limitations. A comparison to pre-pandemic numbers yields a more sober outlook: Measured against the very same quarter in 2019, Kohl’s net sales declined 4.2%, while equivalent sales at Macy’s fell 10.5%.
One favorable surprise was a turn to profitability for the two department shop giants; experts surveyed by FactSet had anticipated a net loss from both. But that was partly thanks to aspects beyond the merchants’ control: Port congestion has resulted in less inventory across the fashion industry, leading to more full-priced selling. Inventory decreased 25% at Kohl’s compared to a year earlier and fell 14% at Macy’s.
Kohl’s shares fell 10% after it reported Thursday, and Macy’s is down around 5% given that reporting previously in the week. Yet they are both trading at rates higher than pre-pandemic levels.
Published at Thu, 20 May 2021 21:32:00 +0000
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