As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the department store industry, including Macy's (NYSE: M) 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 satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 0.6%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 18.5% since the latest earnings results.

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 $8.01 billion, down 4.4% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations significantly.

Macy's delivered the weakest performance against analyst estimates of the whole group. The stock is down 9.8% since reporting and currently trades at $12.

Is now the time to buy Macy's? Access our full analysis of the earnings results here, it’s free.

Best Q4: 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 $2.05 billion, down 5% year on year, outperforming analysts’ expectations by 1%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Dillard's pulled off the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 22.6% since reporting. It currently trades at $353.61.

Is now the time to buy Dillard's? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: 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 $5.40 billion, down 9.4% year on year, in line with analysts’ expectations. It was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ EPS estimates.

Kohl's delivered the slowest revenue growth in the group. As expected, the stock is down 41% since the results and currently trades at $7.11.

Read our full analysis of Kohl’s results here.

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 $4.32 billion, down 2.2% year on year. This print surpassed analysts’ expectations by 0.6%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ gross margin estimates but a miss of analysts’ EBITDA estimates.

Nordstrom delivered the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $24.10.

Read our full, actionable report on Nordstrom here, it’s free.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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