Post-Holiday Surprises: Strong Gains At Target, Kohl's

Despite widespread apprehension among brick-and-mortar retailers, the holidays were happy for some of America’s biggest chains, with sales so strong that both Target and Kohl’s are raising their financial forecasts. And overall, consumers felt more generous: The International Council of Shopping Centers just released its post-holiday research, reporting that people spent an average of $841.50 on gifts and holiday-related items, up from $711 last year.

The ICSC says 90% of those in its survey of 1,000-plus shoppers made purchases in a physical store, 40% used some form of click-and-collect, and 46% ordered something online from a physical retailer. Some 66% shopped at discounters like Target or Walmart, while 47% spent money at traditional department stores and 34% bought holiday items at supermarkets or wholesale clubs.



At Kohl’s, November/December sales climbed 6.9%, compared to the same period last year, and boosted its earnings forecast for the year as a result. Speaking at an investor conference, chairman and CEO Kevin Mansell says the increases came on increasing traffic, and in all its key merchandise categories.

Target, crediting the strength of its holiday ad campaign, says comparable-store sales climbed 3.4% in the November through December period, driven by traffic gains and a 25% jump in digital sales. Even better, it says it saw improvement in all five of its core categories. As a result, it says it now expects a low single-digit advance in 2018.

Best-selling brands included Threshold, KitchenAid and Keurig in the home category, the Nintendo Switch in electronics, and L.O.L. Surprise dolls and the LASER X Double Laser Gaming Set in toys.

Still, not everyone was impressed. “We believe that performance should and could have been better,” writes Neil Saunders, managing director of GlobalData Retail, in his analysis of Target’s numbers. “Prior year comparatives, when same-store sales fell by 1.3%, are very weak and since that time Target has undertaken a raft of initiatives that should have boosted performance.”

He says that while shoppers are finding compelling, there were missed opportunities. “In many stores, the impact of these collections was minimized by poor merchandising and display. This reduced both conversion and sales and created many lost selling opportunities. Performance online, where these ranges are easier to shop, was much stronger.”

Last week, J. C. Penney Company posted a 3.4% increase for the combined nine-week holiday period. The Plano, Tex.-based chain says home, beauty and fine jewelry were the strongest performers, and that e-commerce sales gained in the double-digits. At Macy’s, same-store sales gained 1%.

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