Some retailers enjoyed the fruits of improvements to their delivery services and brick-and-mortar stores with better-than-expected sales growth over the holidays, while other retailers found it harder to grow their sales. Retailers like Kohl’s reported growth that was weaker than previous years, while others such as Target reported growth that beat the forecasts of some analysts.
Kohl’s, in one case, reported shifted comparable sales growth of 1.2 percent between this year’s holiday season and the prior year’s. Kohl’s Chief Executive Officer Michelle Gass pointed to the company’s marketing strategy, product offering and “consistent execution in stores and online” as factors that drove the company’s performance. In a press release, Gass said, “We are particularly pleased with the positive transaction growth and the double-digit digital growth we experienced this holiday, as our customers continue to embrace the omnichannel investments we are making.”
On the day of the company’s announcement, however, the retailer’s stock fell by more than 4 percent. (The retailer, had, however, seen growth of 7 percent over the same time last year.) GlobalData Retail Managing Director Neil Saunders told CNBC that the main point of the earnings isn’t the drop in growth but that the retailer “is executing and delivering in a consistent way with some good progress on both the top and bottom lines.”
Target, however, saw comparable sales growth of 5.7 percent over the holiday season beating out the previous year’s growth during that time. That is, this year’s growth outpaced the 3.4 percent that the company reported as its prior year increase. At the same time, the retailer noted that traffic and a slight rise in the average ticket size helped bolster its comparable sales growth. In addition, Drive Up and Store Pickup also saw whopping growth of over 60 percent from the year before and made up one-quarter of digital sales for the retailer over the holiday season. And in-store fulfilled digital sales “entirely” drove a 29 percent digital sales growth rate.
In a press release, Target Chairman and Chief Executive Officer Brian Cornell said that the company was “pleased with Target’s holiday season performance, which came on top of really strong results in the same period last year. This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests, including both in-store shopping and digital fulfillment.” Even so, shares of the company stock fell just under 3 percent as of the close of markets on Thursday (Jan. 10) amid less impressive holiday sales from Kohl’s and Macy’s, among other retailers.
While Target and Kohl’s might have had different levels of sales growth over the holidays, reports from both retailers suggest that omnichannel and digital efforts could be important for retailers heading into the future.
In Other Brick-And-Mortar News
Sears may still be saved by another bid from ESL Investments: A special committee reportedly plans to consider a revamped bid from Sears Chairman Eddie Lampert’s firm prior to a bankruptcy auction for the company on Jan. 14. The comments are said to have come during a bankruptcy court hearing in on Tuesday (Jan. 8) and are said to have occurred after “round-the-clock negotiations” that went on for days.
According to reports, the revamped bid is for approximately $5 billion, and Lampert is said to take on vendor and tax bills that the retailer was subject to as of its bankruptcy in October. It was reported that a portion of the deposit — $17.9 million — is not refundable. Those funds are said to be the company’s forecasted cash burn before the auction.
In other news, JCPenney is intending to shutter three locations in the spring as it continues to look into its performance. While the company did not say which locations would close, it plans to provide more information with the reporting of its results for the fourth quarter. It was also reported that the retailer’s adjusted basis same-store sales fell 3.5 percent over a period of nine weeks ending on Jan. 5.
At the time of the news, the retailer said it plans to “generate positive free cash flow in fiscal 2018, reduce inventory in excess of $225 million or 8% and expects to end the year with liquidity in excess of $2 billion.” Over the prior year, the company’s shares shed over 67 percent of value and dipped $1 in late December as investors were reportedly worried that the retailer would have poor sales over the holidays.
And Walgreens is bringing mobile technology into its brick-and-mortar locations as it bridges digital and in-store store experiences. The pharmacy chain is bringing handheld tablets and mobile computers from Zebra Technologies Corporation to its stores across the U.S. With the technology, workers can check planograms, look up product information or set up orders for home or direct-to-store delivery.
For more on the latest retail trends, check out the next edition of Retail Pulse.