Department stores reporting 4Q holiday and e-commerce sales give us a look if retailers are going to survive the retail apocalypse and the Amazon takeover. Macys $M, Kohl’s $KSS, Nordstrom $JWN and J.C.Penney $JCP report this week.
Department stores reporting 4Q holiday and e-commerce sales give us a look if retailers are going to survive the retail apocalypse and the Amazon takeover. Macys $M, Kohl’s $KSS, Nordstrom $JWN and J.C.Penney $JCP report this week
In 2016 through 2017 we saw many of the United States’ most prominent retailers shuttering stores or filing for bankruptcy in what has been coined a retail apocalpyse. The rise of ecommerce giant Amazon $AMZN crushed traditional retailers and forced companies to change their sales strategies. Sales promotions and increased digital efforts while shutting down brick-and-mortar locations has been the focus. We look at Q4 earnings to see who has been successful and who maybe a lost cause.
E-Commerce Takeover
Cyber Monday 2017 saw sales hitting nearing $7 billion to new highs. Online or e-Comemrce has devastated many with brick and mortar retailers battling for survival. Some closing some locations, adding e-Commerce focus or some like The Limited closing all traditional stores. The Limited after the holiday season in 2016 closed all 250 of its physical stores to focus all on ecommerce. The closures reportedly sawt 4,000 jobs gone..
The change has been dramatic iconic Sears has less than a third the number of retail stores it had ten years ago. Walmart closed 63 Sam’s Club stores on it’s last earnings report. Payless filed for bankruptcy, and over half of the malls in America. are predicted to close by 2023. 4,000 physical stores have been closed and another 6,800 have been slated to close in 2018.
Americans shift to an oline shopping culture has been more resolute and fast than even Amazon CEO Jee Bezos appears surprised. Amazon is the biggest beneficiary of this trend with. Morgan Stanley forecasting $AMZN could become the world’s first company worth $1 trillion. Whatever you think about stockmarket valuations $AMZN is now double the market value of Walmart $WMT. Walmart has responded by aggressively buying up eCommerce companies but as Walmart knows better than most branding is crucial in retail and $AMZN has that edge over everyone.
What To Look For in Earnings Reports
So what is clear going forward with each report and conference call look for reports on e-commerce efforts, holiday performance and same-store sales growth. This is more than survival, look for commentary on change and outlook going forward.
Department Store Earnings Ahead
Macy’s $M reports Tuesday morning
Macy’s said this month it would close an additional seven stores that were previously undisclosed and lay off around5,000 workers as part of an ongoing effort to adjust to a difficult sales environment. Macy’s says it has now revealed 81 of the 100 store closures it first revealed in it’s August 2016 announcement
- Macy’s consensus estimates EPS seen rising 32% to $2.66 on 2.3% revenue growth to $8.71 billion.
- $M shares closed Friday at $26.74 in a 52-week trading range of $17.41 to $33.73.
Kohl’s $KSS reports Thursday
- Kohl’s consensus is for 23% rise in EPS to $1.75 and 9% sales growth to $6.74 billion.
- $KSS shares closed Friday at $66.47 in a 52-week range of $35.16 to $69.14.
Nordstrom $JWN report Thursday.
- Nordstrom consensus analyst estimates are EPS falling 9.5% to $1.25 as revenue rises 7% to $4.62 billion.
- $JWN shares closed Friday at $53.56 in a 52-week range is $37.79 to $54.00.
J.C. Penney $JCP report on Friday morning.
J.C. Penney closed 138 stores in 2017 and restructured its business to meet shifting consumer tastes and announced plans to open toy shops in all of its remaining brick-and-mortar locations.
- J.C. Penney consensus estimates are for $0.47 in EPS on $4.05 billion in revenue.
- $JCP shares closed Friday at $4.06 in a 52-week range of $2.35 to $6.87.
With each report and conference call look for reports on e-commerce efforts, holiday performance and same-store sales growth. This is more than survival, look for commentary on change and outlook going forward.