FILE PHOTO: A sign marks a Kohl's store in Medford, Massachusetts, U.S., February 21, 2017. REUTERS/Brian Snyder
(Reuters) - Kohl’s Corp (KSS.N) and J.C. Penney Co Inc (JCP.N) posted weak holiday season sales on Thursday, affirming that traditional brick-and-mortar retailers struggled to compete with record-breaking online shopping between Thanksgiving and New Year’s Day.
Kohl’s said it now expects full-year earnings to come in at the bottom end of an already lowered forecast, blaming weak demand for women’s apparel during the crucial shopping season.
The department store operator’s shares fell 9% in premarket trading as it posted a 0.2% drop in comparable sales in November and December. Smaller rival J.C. Penney posted a 7.5% drop for the nine-week period ended Jan. 4.
“E-commerce is definitely compromising the competitiveness of the physical assets of retailers,” CFRA Research analyst Camilla Yanushevsky said. “Amazon, Target and Walmart are really big names in this space and have squeezed out a lot of the little guys.”
Data from Mastercard in December showed U.S. e-commerce sales in the period from Nov. 1 through Christmas Eve rose 18.8%, while overall holiday retail sales, excluding autos, rose just 3.4%.
Macy’s Inc (M.N), however, surprised investors on Wednesday with a smaller-than-feared drop in holiday season sales after trimming its own full-year forecast just two months ago.
In November, Kohl’s also cut its annual profit forecast by at least 40 cents per share to $4.75 to $4.95, blaming weakness in its women’s apparel business back then as well.
Victoria’s Secret owner L Brands (LB.N) on Thursday lowered its profit forecast for the fourth quarter after reporting a 3% drop in comparable store sales for the holiday period, sending its shares down nearly 4%.
Reporting by Uday Sampath and Praveen Paramasivam in Bengaluru; Editing by Saumyadeb Chakrabarty
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Weak holiday sales at Kohl's, J.C. Penney highlight growing online threat - Reuters
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