As we reflect back on the just completed Q2 department store sector earnings season, we dig into the relative performance of Macy's (NYSE:M) and its peers.
Department stores emerged in the 19th century to provide customers with a wide variety of merchandise under one roof, offering a convenient and luxurious shopping experience. They played an important role in the history of American retail and urbanization, and prior to department stores, retailers tended to sell narrow specialty and niche items. But what was once new is now old, and department stores are somewhat considered a relic of the past. They are being attacked from multiple angles–stagnant foot traffic at malls where they’ve served as anchors; more nimble off-price and fast-fashion retailers; and e-commerce-first competitors not burdened by large physical footprints.
The 4 department store stocks we track reported a stunning Q2; on average, revenues beat analyst consensus estimates by 3.41%, Tech multiples have reverted to the historical mean after reaching all time levels in early 2021 and department store stocks have not been spared, with share prices down 12.4% since the previous earnings results, on average.
Macy's (NYSE:M)
With a storied history that began with its 1858 founding, Macy’s (NYSE:M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Macy's reported revenues of $5.28 billion, down 9.5% year on year, beating analyst expectations by 3.33%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations. Like in the previous quarter, Macy's management team called out the uncertain macro environment, causing investors to worry.
“In the second quarter, we delivered better-than-expected top and bottom-line results,” said Jeff Gennette, chairman and chief executive officer of Macy’s.
Macy's delivered the slowest revenue growth of the whole group. The stock is down 22.2% since the results and currently trades at $11.46.
Kohl's (NYSE:KSS)
Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE:KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.
Kohl's reported revenues of $3.9 billion, down 4.7% year on year, beating analyst expectations by 4.96%. It was a weak quarter for the company, with full-year revenue guidance coming in below Wall Street's estimates.
Kohl's pulled off the strongest analyst estimates beat among its peers. The stock is down 6.39% since the results and currently trades at $24.09.
Is now the time to buy Kohl's? Access our full analysis of the earnings results here, it's free.
Nordstrom (NYSE:JWN)
Known for its exceptional customer service that features a ‘no questions asked’ return policy, Nordstrom (NYSE:JWN) is a high-end department store chain.
Nordstrom reported revenues of $3.77 billion, down 7.89% year on year, beating analyst expectations by 2.14%. It was a mixed quarter for the company, with revenue and EPS beating expectations. On the other hand, revenue continues to decline year on year and margin performance was roughly flat year on year, meaning no improvement in gross or operating margins.
Nordstrom had the weakest performance against analyst estimates in the group. The stock is down 15.9% since the results and currently trades at $14.13.
Read our full analysis of Nordstrom's results here.
Dillard's (NYSE:DDS)
With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Dillard's reported revenues of $1.6 billion, down 1.27% year on year, beating analyst expectations by 3.19%. It was a decent quarter for the company, with revenue, gross margin, and EPS all exceeding expectations. The company's continued share repurchases should also please shareholders. On the other hand, same-store sales missed (although again, revenue beat), and the company called out a "cautious consumer" in the press release.
Dillard's delivered the fastest revenue growth among the peers. The stock is down 5.2% since the results and currently trades at $318.68.
Read our full, actionable report on Dillard's here, it's free.
The author has no position in any of the stocks mentioned