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Macy’s Inc. and Kohl’s Corp hit an optimistic note entering the all-important holiday shopping season, which helped to give a boost to stocks of operators of department stores, which have been struggling to expand due to intense competition from retailers online.
Macy’s Inc. stock was up 6.8%, while Kohl’s move higher by 13.4% after comments that were upbeat accompanied their lackluster results for the just ended quarter released on Thursday.
Shares at Nordstrom, which reported late Thursday, were 8% higher, while J.C. Penney was up 7.7% and will post quarterlies on Friday.
CEO at Kohl’s Kevin Mansell said he is encouraged by the company’s strong season for back to school and sales in October.
At the same time, CEO at Macy’s Terry Lundgren said the company’s top-line results for the third quarter were better than the first six months of 2016 and its initiatives for sales-driving continued gaining traction.
Macy’s said that total sales for the full year would end up better than the previous estimate of a 2% decline.
Lundgren added that the company saw during the third quarter results that give confidence to us that we will be able to deliver fourth quarter expectations and guidance for our fiscal 2016.
The apparel business at Macy’s has shown strengthening trends coupled with new initiatives related to watches from Apple, handbags made by Michael Kors and others that will give help to overall performance during the ongoing quarter, concluded Lundgren in his statement.
Macy’s has come under heavy pressure from Starboard Value LP an activist investor and is exploring options for flagship stores such as its Herald Square location in New York City.
The retailer also said that it has plans to shutter close to 100 locations, which equal about 14% of its total number of stores representing over $1 billion in annual sales.
Operators of department stores in the U.S. have struggled to expand due to tough competition from retailers online, especially from Amazon.com.
Net sales at Macy’s were down 4.2% in the most recent quarter, while sales at Kohl’s were down 2.3%.
Same-store sales at Macy’s on the basis of owned plus licensed, were down 2.7%, but were better than a 3.4% drop that analysts were expecting.
Same store sales at Kohl’s were down 1.7% which was higher than analyst’s estimates of 1.4%.