As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the department store industry, including Dillard's (NYSE: DDS) and its peers.
Department stores emerged in the 19th century to provide customers with a wide variety of merchandise under one roof, offering a convenient and luxurious shopping experience. They played an important role in the history of American retail and urbanization, and prior to department stores, retailers tended to sell narrow specialty and niche items. But what was once new is now old, and department stores are somewhat considered a relic of the past. They are being attacked from multiple angles–stagnant foot traffic at malls where they’ve served as anchors; more nimble off-price and fast-fashion retailers; and e-commerce-first competitors not burdened by large physical footprints.
The 4 department store stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.
While some department store stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.6% since the latest earnings results.
Best Q3: Dillard's (NYSE: DDS)
With stores located largely in the Southern and Western US, Dillard’s (NYSE: DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Dillard's reported revenues of $1.45 billion, down 3.5% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
Dillard’s Chief Executive Officer William T. Dillard, II stated, “While retail sales declined 4%, we focused on gross margin, reporting a respectable 44.5% of sales, while working on expense control. We reported cash and short-term investments of over $1.1 billion after repurchasing $107 million in stock. We are looking forward to welcoming our customers and serving them this holiday season.”
The stock is up 31.2% since reporting and currently trades at $509.77.
Is now the time to buy Dillard's? Access our full analysis of the earnings results here, it’s free.
Nordstrom (NYSE: JWN)
Known for its exceptional customer service that features a ‘no questions asked’ return policy, Nordstrom (NYSE: JWN) is a high-end department store chain.
Nordstrom reported revenues of $3.46 billion, up 4.3% year on year, outperforming analysts’ expectations by 3.3%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ gross margin estimates.
Nordstrom delivered the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $24.32.
Is now the time to buy Nordstrom? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Kohl's (NYSE: KSS)
Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE: KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.
Kohl's reported revenues of $3.71 billion, down 8.5% year on year, falling short of analysts’ expectations by 3.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations.
Kohl's delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 35.5% since the results and currently trades at $11.83.
Read our full analysis of Kohl’s results here.
Macy's (NYSE: M)
With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Macy's reported revenues of $4.90 billion, down 2.7% year on year. This number was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts’ EPS estimates.
The stock is down 8.9% since reporting and currently trades at $15.26.
Read our full, actionable report on Macy's here, it’s free.
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