By Joseph Pisani
NEW YORK | It’s still a pretty rough time to be a department store.
Macy’s, Kohl’s and Dillard’s all said Thursday that a key sales figure fell again in the latest quarter as customers increasingly shop online, at discount stores and elsewhere. Nordstrom, the outlier, saw those sales rise 1.7 percent overall and even more at its discount Nordstrom Rack unit.
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. But Macy’s Inc. shares fell 10 percent, Kohl’s Corp. fell nearly 6 percent and Dillard’s Inc. dropped almost 16 percent after reporting a loss of $17.1 million.
Macy’s has cut jobs and closed some stores, has started an off-price brand, and it plans to launch a loyalty program in October that it hopes will bring more shoppers through its doors. The company is open to more changes: When asked Thursday if Macy’s would consider selling medicine, appliances or other items to make it more of a one-stop shop, CEO Jeff Gennette didn’t say no.
Rival J.C Penney, which is scheduled to report results today, has brought major appliances to its stores after a long absence — an area that had been a strength for Sears.
Macy’s, the nation’s largest department store chain, said sales fell 2.8 percent at established stores during the second quarter, its 10th 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 fell 0.4 percent during the quarter. Still, President and CEO Kevin Mansell said foot traffic increased during the quarter. Dillard’s said its sales fell 1 percent at established stores.
At Seattle-based Nordstrom, the flagship Nordstrom unit, which includes online clothing concierge Trunk Club, reported a 1.4 percent increase in sales at established stores. The Nordstrom Rack unit reported a 3.1 percent improvement.
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.
Department stores are “just not as relevant as they once were,” said Neil Saunders at GlobalData.
Nordstrom, though its second-quarter profit declined 6 percent, lifted the lower end of its outlook, and its shares rose 3 percent in extended trading.
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, a year before.