As investors continued to punish retail companies after the lackluster holiday season, most of the leading store operators witnessed stock selloff Thursday. It was triggered by the downbeat sales numbers released by Macy’s (M) earlier in the day. It seems nothing worked in favor of the retailers this time and positive factors such as the booming economy and strong job market failed to lift consumer sentiment.
The dismal results prompted Macy’s to revise down its outlook for fiscal 2018 and currently expects store sales to remain flat year-over-year. According to the management, the softness was more visible in certain home furnishing items, sportswear, and cosmetics.
Among others, Kohl’s (KSS) reported a significantly slower increase in holiday sales. Though Target (TGT) said sales growth accelerated from last year, the company maintained its mediocre outlook for fiscal 2018.
Macy’s lost more than 18% of its market value Thursday and closed the session just above $25. Kohl’s stock ended the day’s trading down 5%, paring a part of the recent gains, and continued to lose in the after-hours. Target’s relatively better sales numbers did not help it and the stock was down 2.85%. The case of JCPenney (JPC) and Dillard’s (DDS) was not different.
Apparently, the overall retail performance did not match the market’s high expectation, which was fueled by households’ growing spending power. The downward pattern in the sales of department stores – the worst affected retail segment this season – clearly shows more and more brands and shifting to the direct-to-customer business model and that e-commerce companies are eating into the market share of traditional store operators.
While it might not be a viable option to offer additional discounts going forward, the one thing department store operators need to do is to ramp up their e-commerce platforms so as to counter the digital onslaught.
We’re on Apple News! Follow us to receive the latest stock market, earnings, and financial news at your fingertips
Most Popular
Should investors worry about Micron’s (MU) weak Q4 results and guidance?
The semiconductor industry is a rapidly growing business segment that currently thrives on the digital transformation wave. The demand for memory chips and other semiconductor products increased over the years,
What has Bed Bath & Beyond (BBBY) outlined for this fiscal year?
Shares of Bed Bath & Beyond (NASDAQ: BBBY) were up on Friday, a day after the company delivered disappointing results for the second quarter of 2022. The company reported a
NKE Earnings: Highlights of Nike’s Q1 2023 results
Nike, Inc. (NYSE: NKE) has reported a decrease in net profit for the first quarter of 2023, despite a modest increase in revenues. The company's stock suffered a big loss
