Retail Sales in December See Mixed Results

Cornelia Mascio
Gennaio 13, 2019

Macy's combined same-store and online sales rose by 1.1 percent in November and December.

Macy's Inc., the country's largest department-store chain, said soft sales undercut its holiday business during December.

Despite a strong start to the holiday season, positive sales results during Black Friday and Cyber Monday weren't enough to get Macy's across the line, as it experienced weaker-than-expected performance during December.

Meanwhile, Kohl's reported a small sales growth that showed a dramatic slowdown from a year ago.

Bookseller Barnes & Noble estimated sales growth at 1.3 percent over the two-month period, adding that its earnings guidance "may be reduced by as much as 10 percent" due to increased advertising and promotional costs.

Shares of Macy's plummeted almost 18 percent Thursday, suffering its worst one-day decline. Despite the solid performance, Target's shares dipped almost 5 percent on Thursday. Even Target's stock took a hit, falling almost 3 percent despite showing strong holiday sales.

Macy's weak holiday forecast follows downbeat numbers from rivals J.C. Penney Corp (JCP.N) and Kohls Corp (KSS.N). 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.

"It was a good season. There is a lot of uncertainty out there".

Those results come as overall sales for the 2018 US holiday shopping season hit a six-year high as shoppers were encouraged by early discounts, according to a Mastercard report in late December. Saunders said investors are also anxious that a recovery among traditional stores like Macy's is losing momentum, raising concerns that they might have to ramp up investments even more to increase sales. Department store sales slipped 0.2 percent during the same period. Its previous guidance issued in November called for EPS of $4.10 to $4.30.

Before Christmas, retailers had been expecting a strong sales period, with less post-November discounting and higher price points.

Shares declined almost 18 percent after the company said it now expects same-store sales growth of 2 percent in fiscal 2018, down from an earlier forecast of between 2.3 percent and 2.5 percent. Comparable online sales climbed 29 percent.

The Minneapolis-based company said its expects full year 2018 earnings to be in the range of $5.30 and $5.50 per share. The maintained outlook may have disappointed investors.

At the same time, the company revised its financial guidance for 2019, with comps now expected to advance 2% rather than 2.3% to 2.5% and earnings per diluted share, with certain one-time charges excluded, expected to come in at $3.95 to $4 rather than $4.10 to $4.30. That's well below the per-share projections of $4.23 from industry analysts.

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