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Mall-Based Retailers Take Beating After U.S. Shoppers Turn Away

Kohl’s, J.C. Penney and L Brands all reported drops in same-store sales over the holiday shopping season.

(Bloomberg)—Grim news continues to roll in for mall-based retailers, with several companies reporting declines in a key sales metric over the holiday period despite a broader rise in consumer spending.

Kohl’s Corp., J.C. Penney Co. and L Brands Inc. all reported drops in same-store sales, which is a critical measure of retail success. Macy’s Inc. also reported a drop in comparable sales on Wednesday, while Bed Bath & Beyond withdrew its financial projections amid weak results.

The holidays are the most important time of year for most retailers, so hopes for a sustained turnaround in large part hinged on a better performance in the final months of 2019. But deeply ingrained trends -- such as digital-savvy shoppers migrating to wherever the discounts are, forcing prices down across the market -- are preventing many retailers from regaining their former stature.

The declines at Kohl’s and L Brands in particular were surprising, said Poonam Goyal, an analyst with Bloomberg Intelligence.

“Sales should have been up, but they weren’t and that’s a bit concerning,” Goyal said. “They could have posted better results, and the fact that they didn’t shows the need for them to drive traffic and maybe even shrink their stores into smaller formats. It’s time to do more.”

The biggest retailers -- especially Inc., Walmart Inc. and Target Corp. -- have been the biggest beneficiaries of the mall-based troubles.

Here’s a look at some of the details the companies released on Thursday.


Kohl’s reported a same-store sales decline of 0.2% in November and December. The company also said profit for fiscal 2019, which ends in February, will be at the low end of its previously announced range of $4.75 to $4.95 a share.

Chief Executive Officer Michelle Gass said strength in e-commerce, beauty, footwear and other areas was offset by weakness in women’s apparel, and said the company is working “with speed” to fix the problem.

“Although the sales dip at Kohl’s is only modest, it is disappointing that the company was not able to continue the growth posted during the third quarter,” Neil Saunders, managing director of GlobalData Retail, said in emailed comments. “This is especially so as the consumer economy was strong over the period, so the flat performance is more reflective of Kohl’s and its strategy rather than of external dynamics.”

Kohl’s shares fell as much as 9.6% to $44.63, the most in more than a month.

L Brands

The owner of Victoria’s Secret also posted negative results, a sign its efforts to shift its marketing approach haven’t been enough. L Brands has struggled to adjust to a broader change in the lingerie business, with competitors gaining traction by embracing different body types while Victoria’s Secret continued to push its push-up bra aesthetic.

Same-store sales dropped 12% for Victoria’s Secret, and L Brands cut its earnings forecast for the fourth quarter to about $1.85 a share, down from a previous projection of about $2.

Investors shrugged off the results, however, with L Brands stock up 1.93% to $18.5.

J.C. Penney

The Dallas-based department store chain, which has been fighting to reverse falling foot traffic and improve its inventory management, reported that same-store sales fell 5.3% in the holiday period when excluding the impact of its exit from the appliance and furniture categories.

J.C. Penney reaffirmed its forecast for a full-year adjusted comparable-store sales decline of 5% to 6%. The company is scheduled to report earnings on Feb. 27. The shares fell as much as 8.3% to $1.1.

To contact the reporters on this story: Jonathan Roeder in Chicago at [email protected];

Jordyn Holman in New York at [email protected].

To contact the editor responsible for this story: Sally Bakewell at [email protected]

© 2020 Bloomberg L.P.

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