Macy's, Kohl's Tout Varying Growth Strategies as They Report Earnings
November 09 2017 - 8:39AM
Dow Jones News
By Austen Hufford
Department-store operator Macy's Inc. focused on profit margins
in the latest quarter, while Kohl's Corp. sought to drive sales, as
the retailers took different tacks in contending with the rise of
e-commerce.
Kohl's executives pointed to a strong back-to-school season,
leading to surprise growth in same-store sales for its third
quarter. Macy's executives, meanwhile, said they saw an increase in
gross profit margin, thanks to efforts to control spending on
inventory.
Shares of Macy's rose 2.1% in premarket trading as the company
beat profit estimates, while Kohl's dropped 8.7% as it missed
expectations.
Macy's same-store sales -- a metric that tracks sales at
established locations that haven't recently opened or closed --
fell 4% in its third quarter, worse than the 2.8% fall analysts
from Consensus Metrix had expected. Kohl's said comparable sales
rose 0.1%; analysts from Consensus Matrix had expected a 0.7%
fall.
The shift to online shopping has hurt Macy's and its peers,
which have responded by closing weaker locations and investing in
e-commerce. Macy's has also been expanding its discount outlet
brand, Backstage, and recently launched a new customer loyalty
program. Kohl's has said it views a large store footprint as
important, saying that e-commerce sales slow in areas with fewer
stores.
At Macy's, gross margin came in at 39.9%, up from 39.8% in the
same quarter last year. At Kohl's, gross margin fell to 36.8% from
37.1%
Macy's posted a 6.1% decline in revenue to $5.28 billion, driven
by both fewer stores and the slide in comparable-store sales. It
posted a profit of $36 million, or 12 cents a share, compared with
a profit of $17 million, or 5 cents a share, in the same quarter
last year, helped by the improvement in margins. Adjusted earnings
per share came in at 23 cents.
Analysts polled by Thomson Reuters had expected revenue of $5.31
billion and adjusted earnings per share of 19 cents.
Kohl's saw revenue increase 0.1% to $4.33 billion. Profit came
in at $117 million, or 70 cents a share, compared with $146
million, or 83 cents a share. Analysts had expected revenue of $4.3
billion and earnings per share of 72 cents.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
November 09, 2017 09:24 ET (14:24 GMT)
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