2019 The Year Online Shopping Beat Retail at the Mall
A strong U.S. economy and robust consumer spending wasn’t enough to boost holiday sales at many department stores and mall-based chains, as Americans continue to set record numbers of purchases online.
L Brands Inc., parent of J.C. Penney, Kohl's and Victoria Secret, reported lower sales in the critical months of November and December. All three companies entered the holiday season with falling sales as they lost the battle with Amazon.com as well as traditional rivals such as T.J. Maxx and Target.
L Brands said comparable sales, which include sales from company-owned stores in North America open at least a year and digital sales, fell 3% for the nine weeks ended Jan. 4.
The company, which also owns Pink and Bath & Body Works, said it now expects fourth-quarter earnings of $1.85 a share. It had previously guided for earnings of $2.00 a share.
Shares fell 2% in premarket trading.
“Our customer data shows that a chunk of clothing spend from Kohl’s customers has migrated to other retailers, most notably to Target and various off-price players,” said Neil Saunders, managing director of research firm GlobalData Retail. “This is reflective of the weaker proposition at Kohl’s but also underlines the success Target has had in improving its own offer.”
The sales updates came a day after Macy’s reported its comparable sales fell 0.6% in the holiday season and said it would close 30 stores.. Bed Bath & Beyond Inc. also reported a drop in comparable sales for the third quarter. Comparable sales generally include online sales and reflect stores open at least a year.
Despite the rest of the Bloodbath in retail, Walmart and Target have reported rising sales and store traffic for much of the past year, as they ramp up online ordering and in-store pickup services. Costco also reported comparable sales jumped 9% in the five weeks ended Jan. 5. The results include e-commerce sales and international stores. Costco shares rose 2% Thursday morning and, like shares of Walmart and Target, are trading near all-time highs.
Kohl’s said its comparable sales for November and December slipped 0.2%, citing weakness in its women’s apparel business. It also warned that profits would be at the low end of its prior target range. Shares were down 8% to $45.45 premarket.
“We are managing the business with discipline and we expect to deliver on our earnings guidance for the full year,” Chief Executive of Kohl's Michelle Gass said.