Department Store & Off Price Retail Earnings Commentary: Macys, Kohls, TJ Maxx, Nordstrom

Another quarter has passed with Q2 earnings providing a preview on where retailers believe the important and critical quarters of Q3 and Q4 will end up. All reports are now complete (excluding Costco) and the exaggerations of the death of retail have subsided but there are obvious pockets of strength and weakness. Nordstrom and Saks full line stores surprised to the upside, Off Price continued its' march and Dollar Stores showed the best comp sales increase in several years. Bottom line: Q2 was better than expected, there seems to be optimism for Q3 and Q4 within Off Price, Dollar Stores and one Department Store.

JC Penney

  • Posted the 4th consecutive quarter of negative same store sales growth of -1.3%
  • Margin improved from last year's quarter
  • Focus on additional rollouts in big ticket areas like appliances and home continue along with expanded Sephora store in concepts
  • Bottom line: JC Penney will continue to close stores and limp along as malls continue to weaken and their digital offering remains average


  • Posted the 6th consecutive quarter of negative same store sales growth of -0.4%
  • Margin declined slightly from last year's quarter
  • Kohls still remains as one of the few large scale department stores that has publicly stated no plans of store closures
  • Bottom line: While the same store sales decline was marginal, I remain skeptical that all of the pain is behind them


  • Same store sales came in down 3.6%, the 10th consecutive quarter of negative growth
  • Margin declined slightly from last year's quarter
  • Full year guidance was confirmed
  • Bottom line: Pain will continue with further store closings and pressure on the existing stores, Backstage and Blue Mercury aren't enough to reverse the course.

Nordstrom & Nordstrom Rack

  • Same store sales came in positive for both groups with Nordstrom at 1.4% and 3.1% for Nordstrom Rack
  • Strong online results in and offset the store results of down 4.4% for Nordstrom and Rack down 1.0%
  • Margin was lower than last year as the company was a bit more promotional to offset the store weakness
  • Guidance was essentially unchanged with same store sales to remain flat
  • Bottom line: Nordstrom remains the best of breed department store with an adequate mix of full price and off-price


  • Posted another strong quarter with 4.0% same store sales growth
  • Guidance for Q3 is 1.0-2.0% growth versus a 7.0% increase in Q3 of 2016
  • Bottom line: Ross continues to do well and should continue to gain share with their flagship Ross banner and dd's Discount stores despite a non-existent ecommerce offering


  • The TJ Maxx & Marshalls duo posted a 2.0% same store sales growth; up from 0.0% last quarter
  • The overall same store sales increase was 3.0% driven by the HomeGoods increase of 7.0%
  • Guidance was raised for the full year
  • Bottom line: TJX continues to see growth in their existing store base and is aggressively opening new stores. Once the store growth slows, look for TJX to truly get into ecommerce and further focus on international growth.

Other Points to Note

  • Dollar Stores both posted the best same store sales figures in years
  • Saks posted one of their best quarters in several years


Q1 Earnings Commentary: Department Stores

Q1 Earnings Commentary: Off Price