“We’re scratching our heads,” says Macy’s chief financial officer
Nordstrom, Macy’s, J.C. Penney, and Kohl’s all reported falling comps in the first quarter, setting off alarm bells about the state of retail and department stores in particular.
On Macy’s most recent conference call, chief financial officer Karen Hoguet said the falling sales didn’t make much sense given government data showing retail sales rising.
“We’re, frankly, scratching our heads,” she said. “We see the same economic data you all see, and it would point to a customer that would be spending more.”
Hoguet’s company suffered a particularly bad first quarter, with Macy’s comps trumbling 6.1 percent—its fifth straight quarter of declining same-store sales. Comps also fell 3.9 percent at Kohl’s (that chain’s biggest drop since the recession), 1.7 percent at Nordstrom, and 0.4 percent at J.C. Penney—which was a surprise, given that retailer’s recent hot streak.
The chains also reported mixed results for jewelry.
Kohl’s said fine jewelry showed “relative strength,” and Macy’s, which is revamping its jewelry department, said the category performed “relatively well.” On the other hand, Nordstrom singled out jewelry as weathering “notably tougher trends.”
Executives said they believed part of the issue in the macro environment was the growing importance of online shopping.
“We are seeing a transformation in our business model,” said Nordstrom chief financial officer and executive vice president Michael G. Koppel. “The impact of technology in digital on the customer experience continues to accelerate.… We continue to see traffic falling off in malls. And how we think about our store-based assets will probably require some level of adjustment.”
Still, most hoped the tough quarter would just be a temporary blip.
“The first quarter…is a really small percentage of the total year,” said Kohl’s CEO Kevin Mansell. “We still feel good that the sales trend will improve in the second quarter.… And we definitely feel like it’ll improve further as we go into the back half.”
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