Sean D. Emory
MACY'S PROVES THE DEPARTMENT STORE COMEBACK...
Since really 2016 I have been talking about the department store comeback. Here's just the latest one in August 2017, here.
The chart we kept highlighting was the acceleration in year over year department store retail sales.
The story remains today and is showing up in earnings for companies like Macy's. It is my view that there will always be a desire for department stores. A place where consumers can go ahead and find many brand named items across a variety of categories in one location. Macy's is the latest to prove that they can still exist in an omnichannel world. Macy's just reported and their comparable same-store sales growth came in at 3.9%. They did make it clear that this quarter included a pull forward of their friends and family sale. Without the sale during the first quarter, same-store sales would have been 1.7%, still pretty good.
Above is the comparison of same-store sales across Macy's, JC Penney, and Nordstrom. As you can see, all three have moved back into positive territory.
While many market participants have placed a black eye on the department store segment, a select few have been able to stabilize and move back into growth territory. It will be interesting to monitor.
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Sean D. Emory
Avory & Co. Founder & Chief Investment Officer
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