Macy’s and Kohl’s raised their projections for 2021 after easily beating expectations in the just-ended second quarter.
Macy’s expects sales for the year of between $23.5 billion and $23.95 billion.
Americans are going back to stores again to buy dresses, luggage and other goods that fell to the bottom of the priority list last year when the pandemic struck.
“We are emerging from the pandemic, a stronger company than we were before it began in the second quarter,” said Macy’s CEO and Chairman Jeff Gennette.
Major retailers are rolling out quarterly earnings reports this week and next, and the data so far has consistently pointed to a return to almost normal behaviour by U.S. shoppers.
That means the explosion of online shopping during the pandemic is easing, with more people heading to stores.
Macy’s online sales fell 6% compared with last year when they surged 53% in the same time frame last year. Still, online sales were up 45% when compared with the second quarter in 2019, so some changes may be here to stay.
Retailers are now monitoring the spread of the delta variant, which has led to more mask mandates.
They’re also grappling with higher prices just as government stimulus and other benefits, which helped energize spending, fade.
Snarled supply chains are still snarled and companies can’t find workers.
And pre-pandemic threats for traditional department stores are still there, such as alternative clothing chains like T.J. Maxx and online sellers, too.
Last year, Macy’s lost $431 million in the same period.
Macy’s now expects sales for the year of between $23.5 billion and $23.95 billion.
Kohl’s reported earnings of $382 million, or $2.48, for the three-month period ended July 31, topping analyst expectations of $1.26. Revenue rose 31% to $4.22 billion, also better than expected.
A partnership with Amazon that allows customers to return items at Kohl’s locations has also created new customers for the department store, said Gass.
The news of potential brick-and-mortar stores for Amazon would not threaten that partnership, Gass said.
Kohl’s now expects annual sales to increase in the low-twenties percentage range compared with previous projections of mid-to-high teens. Adjusted earnings per share is projected to be between $5.80 and $6.10.
