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Department Stores Report Declines for the First Quarter
Several department stores reported results for their first-quarter earnings on May 11, and the results included steep same-store declines for Macy’s Inc. and Dillards Inc.
Same-store sales at Macy’s declined 5.2 percent in the first quarter. Its net sales were $5.338 billion, a decrease of 7.5 percent compared to the first quarter in 2016. Dillards Inc.’s same-store sales declined 4 percent. Its net sales were $1.386 billion. Same-store sales at Nordstrom Inc.d eclined 0.8 percent in its first quarter. Its net sales increased 2.7 percent to $3.3 billion. For Kohl’s Corp., same-store sales declined 2.7 percent. Kohl’s total sales for the period was $3,843 billion.
The results come at a time when the retail business is looking for some wins during what has been a tough time, said Ken Perkins, president of research firm Retail Metrics Inc. In a May 10, research note, he wrote that a steady drumbeat of news on bankruptcies and store closings engendered a number of stories using terms such as “Retailpocalypse” and “Retailmegeddon.” But Perkins amended his outlook once the department stores reported results on May 11, noting that sales were better than many Wall Street analysts forecast.
“Things are really tough out there,” he said on a May 11 phone call. “With same-store sales declining, as a retailer you are going to find it hard to generate more earnings growth while sales are in decline. The overwhelming problem is declining foot traffic to their locations and that there has been a massive shift that has been taking place.”
More people are shopping via m-commerce, or shopping through their cell phones. While department stores are catching some of that m-commerce, it doesn’t necessarily help the bricks-and-mortar stores, he said.
Jeff Gennette, president and chief executive officer of Macy’s Inc., said the company’s focus in 2017 will be stabilizing its bricks-and-mortar business.
“At the same time, we will invest to aggressively grow our digital and mobile business while continuing the integration of our online and offline experience to allow our customers to shop the way they live,” Gennette said.
