Shares of department stores Macy's and Kohl's tumbled Friday after both reported falling same-store sales. Fred Katayama reports.
Falling quarterly sales at two major department stores, but those declines were less than Wall Street expected. Sales at existing Kohl's stores slipped 0.4 percent, down for the sixth straight quarter. Transactions fell during the three-month period, but they increased in July. Kohl's said traffic still remains slightly negative in the (current) quarter. Macy's quarterly same-store sales fell 2.5 percent. Its overall sales fell, too, partly due to the closure of two stores. To boost traffic, Macy's is revamping its beauty business, and Kohl's is adding more national brands like Under Armour. Moody's analyst Christina Boni said, ""Macy's and Kohl's both posted relative improvement in sales trends as initiatives undertaken take hold. Departments stores continue to have much work ahead as they battle to stay relevant." Profit rose at both retailers, and those earnings topped estimates. But shares of Kohl's and Macy's opened lower Thursday morning. Department stores have been struggling. Mall traffic keeps shrinking, and they face tough online competition. So they've been cutting costs by closing stores, selling or leasing their real estate, and keeping inventories tight.