
As major retailers like Target, Kohl’s and JC Penney start to tip their holiday hands to consumers, gloomy sales numbers from Macy’s have observers wondering if the looming
season might be worse than expected.
While the company’s third-quarter earnings operating income of $369 million was in line with expectations, its sales came in
well below forecast, falling 5.2% to $5.87 billion from $6.2 billion in the same period a year ago. On a comparable-store basis, they dropped 3.6%. And while some of that was due to less spending
from international tourists because of the dollar’s strength, Macy’s says it’s also because consumers just aren’t that interested in spending.
“We are
disappointed that the pace of sales did not improve in the third quarter, as we had expected,” CEO Terry J. Lundgren says in its earnings announcement. “Spending by domestic customers
remained tepid, especially in key apparel and accessory categories.” It says it expects that weakness to continue throughout the holidays.
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And while Standard & Poor's
Ratings Services says its ratings of Macy’s aren’t changed by the news, “we believe apparel trends will remain soft in the remainder of 2015, given the heightened industry
competition and the shifting trend in consumer spending toward electronics, restaurants, health care, and services.”
Macy’s says that as it heads into the fourth
quarter, it's revving the promotional engines. “We are shifting our organization into overdrive to focus on sales-driving activities in the holiday shopping season,” he says.
Target is also readying its promotional onslaught, and says its Black Friday strategy will focus on “10 Days of Deals,” offering steep cuts in electronics, kitchenware, and toys
from Nov. 22, the Sunday before Thanksgiving, through Dec. 1. And it is offering an online Black Friday pre-sale, scheduled for the day before Thanksgiving. In a new twist, people who spend $75 or
more on Black Friday get a 20% discount on any purchases made between Dec. 4 and 13.
Kohl’s, which is introducing its new “All Together Now” with a series of videos focusing on families reunited after many years, is also using a one-day online event to preview Black Friday deals.
And
in a sign that retailers are becoming even more serious about the Black Friday weekend, JC Penney says that not only will it open for shopping on Thanksgiving, it will do so at 3 p.m., earlier than
Macy’s, Target and Kohl’s, all scheduled to open their doors at 6.