Two U.S. retailers’ reports of slower growth at the end of last year are undercutting the industry’s high-flying predictions from the start of the lucrative holiday shopping season.
Most stores garner a significant portion of their annual profit in November and December, and a robust economy coupled with higher take-home pay due to the GOP-led tax cuts had experts predicting a potentially record-breaking period. While some early reports appeared to validate those forecasts, early results from Macy’s and Kohl’s are raising doubts.
Macy’s cut its same-store sales forecast for the year through January to 2 percent on Thursday, down from an estimated 2.3 percent to 2.5 percent at the start of November. The retailer’s stock fell 18 percent in New York trading to $26.11, the lowest since February 2018.
Online and in-store sales at rival Kohl’s rose 1.2 percent during the holiday, less than the 7 percent during the same period a year ago. Still, the Menomonee Falls, Wis.-based company increased the lower end of its fiscal 2018 forecast to $5.50 per share, up from $5.35.
“The organization once again delivered a very strong holiday that topped last year’s exceptional holiday season,” CEO Michelle Gass said in a statement. “The strong performance we achieved this holiday reflects the compelling product offering, great marketing strategy, and consistent execution in stores and online.”
Kohl’s stock fell 4.8 percent in Thursday trading to $66.54.
It isn’t all doom and gloom for retailers, though. E-commerce giant Amazon last month touted a record-breaking holiday season, claiming the highest orders for the two-month period in the company’s history.
Target, meanwhile, said sales at stores open at least a year rose 5.7 percent in November and December, an improvement over 3.4 percent growth last year and higher than what some analysts expected. Despite reaffirming its full-year earnings forecast of $5.30 to $5.50 per share, the Minneapolis-based company’s stock dropped 2.9 percent to $68.29 on Thursday.
