Macy's doubled its quarterly profit and grew its margins while rival Kohl's bottom line fell and margins slid. Fred Katayama reports on the tale of two department stores.
Diverging tales of two department stores. Macy's doubled its quarterly profit by keeping a tight lid on inventory, and that beat analysts' forecasts. But sales at existing stores fell 3.6 percent as the retailer struggled with attracting customers to its stores. Still, Macy's voiced optimism about the holiday shopping season and said it's sticking to its profit and sales forecast for this year. Quite the opposite picture at rival Kohl's. Its profit fell 18 percent because hurricanes forced it to close some stores and expenses rose. But, unlike Macy's, its same-store sales inched higher off a strong back-to-school sales season, snapping six quarters of declines. And it upped its profit target for the year. Moody's senor analyst Christina Boni said, "Kohl's sequential improvement in traffic was encouraging with a strong back-to-school as Macy's sales remained weak." But in contrast to Macy's, which managed to grow its profit margins, Kohl's' profitability slid. So did its stock at the market open Thursday, extending their 17 percent decline this year. Macy's shares rose, chipping away at their 50 percent drop this year.