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Strong economy does little to lift department store sales
NEW YORK (AP) ‐ It was supposed to be a great holiday shopping season. Many investors had expected department stores to enjoy robust sales in light of a U.S. economy buoyed by low unemployment, higher wages, strong consumer confidence and cheap gas.So when Macy’s and Kohl’s reported lackluster numbers on Thursday, they were taken aback, sending retail stocks into a tailspin and calling into question whether such mall-based chains can compete in a changing landscape where shoppers are shifting more of their spending online. Macy’s saw only a slight increase of 1.1 percent in sales during November-December at stores opened at least year. And while sales were strong during Black Friday and Cyber Monday, the company said sales fell off noticeably until the week of Christmas. Meanwhile, Kohl’s reported a small sales growth that showed a dramatic slowdown from a year ago. Comparable sales rose 1.2 percent, versus 6.9 percent in the previous year. Shares of Macy’s plummeted nearly 18 percent Thursday, suffering its worst one-day decline. Kohl’s stock closed down nearly 5 percent. Even Target’s stock took a hit, falling nearly 3 percent despite showing strong holiday sales. Earlier this week, J.C. Penney, one of the stragglers in the department store sector, reported a drop in comparable store sales of 3.5 percent for November and December. But because Macy’s is considered a barometer of spending, particularly for the middle class and for mall spending, investors may be looking for deeper meaning in its performance. Posted by: Besoeker 2019-01-11 |
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