Department-store chains saw key sales figures fall again in the latest quarter as customers increasingly move online, though at Macy’s the decrease wasn’t as bad as Wall Street expected, and Kohl’s managed to keep the decline to just 0.4 percent.
Shares in the stores fell, with Macy’s down 4 percent and Kohl Corp.’s off nearly 9 percent. Dillard’s Inc. dropped 15 percent after reporting a loss of $17.1 million.
Macy’s has cut jobs and closed some stores to try to reverse falling sales. It has also started an off-price brand, and it plans to launch a loyalty program in the fall that it hopes will bring more shoppers through its doors. CEO Jeff Gennette cited “a notable contribution” from changes in the women’s shoes and jewelry departments.
And Kohl’s is trying to attract more shoppers by offering more outside brands and cutting some of its in-house clothing lines.
Macy’s, the nation’s largest department store chain, said sales fell 2.8 percent at established stores during the second quarter, its tenth such decline in a row. But that was better than the 3.3 percent drop that analysts expected, according to FactSet. Kohl’s saw same-store-sales fall 0.4 percent during the quarter. Still, President and CEO Kevin Mansell said foot traffic increased during the quarter.
Analysts at Citi said the results from Macy’s were “less bad,” but they added that the company’s sales and gross margins are “still very weak.” At Kohl’s, they saw “better than expected” sales and hints that the back to school season had started well.
Macy’s had warned investors in June that its profit margins would keep shrinking this year. For the quarter ending July 29, the Cincinnati-based company reported net income of $116 million, or 38 cents per share. That’s up from $11 million, or 3 cents per share, in the same period a year before.
Earnings adjusted for non-recurring costs came to 48 cents per share, beating the 45 cents per share analysts expected, according to Zacks Investment Research. Revenue fell 5 percent to $5.55 billion, beating expectations of $5.5 billion, according to Zacks.
For the full year, Macy’s expects earnings in the range of $2.90 to $3.15 per share, below the $3.27 per share that analysts expected, according to FactSet.
Kohl’s saw profit jump 49 percent to $208 million, or $1.24 per share. The department store operator reported a $128 million charge a year ago for store closures. Revenue fell just under 1 percent to $4.14 billion.
But Dillard’s swung to a loss after reporting a profit in the same period a year earlier, as increased inventory led to big discounts. The average estimate of three analysts surveyed by Zacks Investment Research had been for earnings of 21 cents per share.