Kohl’s and Macy’s are getting almost back to where they were before the pandemic struck. Unfortunately for them, competitors are already well ahead of that.
In the quarter ended May 1, Kohl’s and Macy’s saw net sales rebound 70% and 56%, respectively, compared with a year earlier, as shoppers looked to refresh their stale wardrobes. Dressier categories, including even tailored clothes, are making a comeback, Macy’s noted in its earnings call on Tuesday. The bounceback was largely to be expected after a dismal comparable quarter last year, when stores had to close due to Covid-19 restrictions. A comparison to pre-pandemic numbers yields a more sober outlook: Measured against the same quarter in 2019, Kohl’s net sales declined 4.2%, while comparable sales at Macy’s fell 10.5%.
One positive surprise was a turn to profitability for the two department store giants; analysts polled by FactSet had expected a net loss from both. But that was partly thanks to factors outside of the retailers’ control: Port congestionacross the apparel industry, leading to more full-priced selling. Inventory declined 25% at Kohl’s compared with a year earlier and fell 14% at Macy’s.
Kohl’s shares fell 10% after it reported Thursday, and Macy’s is down around 5% since reporting earlier in the week. Yet they are both trading at prices higher than pre-pandemic levels.
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