Macy's reported comp-store sales growth for November and December on Thursday, but it wasn't enough to instill confidence in the company, especially since Macy's also revised its guidance downward to flat comp-store sales growth in the near future.
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It didn't take long for Macy's investors to head for the door in a rush. The department store's stock had its worst day ever, losing almost 18% of its value.
Comp-store sales at Macy's company-owned stores were up 0.7% for the year. Including owned and licensed stores, comps were up 1.1%.
Those numbers might be better than declining sales — the kind that helped put Sears into its near-death spiral — but they are still weak in the context of the 2018 holiday season, when many retailers did much better.
Overall, Mastercard SpendingPulse reported that U.S. retail sales spiked 5.1% between Thanksgiving and Christmas, the strongest growth in the last six years.
"Consumer confidence translated into holiday cheer for retail,” Mastercard Senior Advisor Steve Sadove said. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
Amazon hasn't reported its holiday numbers yet, but the company has asserted that it had a record-breaking sales season. Mastercard SpendingPulse said online U.S. shopping saw a gain of 19.1% between Thanksgiving and Christmas, compared to 2017.
Target reported comp-store sales growth of 5.7% in November-December, while Costco enjoyed a 9.8% gain over that period.
On the other hand, JC Penney suffered an even worse holiday season than Macy's, with comp-store sales off 3.5% for the nine-week period ended Jan. 5.
"The holiday season began strong — particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” Macy's Chairman and CEO Jeff Gennette said in a statement.
That kind of weakness might be part of the normal fluctuation of sales across the years, but there is also a strong case to be made that department stores are suffering from increasing obsolescence.
"Department stores, as Baby Boomers and Generation X came to know them, no longer offer a reason for being. All they offer are products inside of four walls," retail expert Chris Walton writes in Forbes.
"They have no true points of differentiation anymore because the average consumer no longer needs them as a means to acquire product."
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