With America’s election fever starting to cool today, retail’s financial set is getting down to business.
But business has just been OK.
Macy’s Inc. kicked off off what’s generally expected to be a blah third-quarter earnings season on a solid note today. The company outperformed expectations and posted a 4.3 percent rise in earnings. Profits rose to $145 million, or 36 cents a diluted share, from $139 million, or 32 cents, a year earlier.Wall Street expected the company’s earnings per share to fall to 29 cents.
Macy’s is generally seen as one of the winners in a retail landscape where the gulf between the leaders and the laggards is widening as consumers pick and choose their purchases carefully.
“There are a few things that are good for the consumer, confidence is improving, but it’s not off to the races,” said Marie Driscoll, a retail consultant. “We’re going to see modest opportunity for margin expansion on lower input costs [such as cotton], but top line, not so strong. It’s pretty promotional out there.”
Retail continues to be a market-share war.
“Gap has done well and Macy’s has done well, but meanwhile, J.C. Penney’s is just giving away share,” Driscoll noted. “In the aggregate, I don’t think [the overall landscape] is that great.”
As quarterly results roll out over the next two weeks, it will become clear who is gaining the most traction with shoppers.
Wall Street and retail stocks both gained ground Tuesday as Americans headed to the polls to vote on who will lead the country for the next four years.
Among the gainers were companies set to release results soon, including Gap Inc., up 1.6 percent to $35.94; Nordstrom Inc., 1 percent to $58.20; J.C. Penney Co. Inc., 0.8 percent to $23.53, and Macy’s, 0.5 percent to $41.38.
Gap has been on a tear lately, after a prolonged slump. Analysts project the firm’s third-quarter earnings per share jumped 60.5 percent to 61 cents. Nordstrom is also gaining ground, with earnings expected to rise 22 percent to 72 cents a share.
On the other end of the spectrum, Penney’s, which is revamping as a specialty department store, is expected to post quarterly losses of 5 cents a share, down from earnings of 11 cents a year earlier.
Results exclude special items such as restructuring charges and represent the current analyst consensus estimates reported by Yahoo Finance.
Matthew Boss, a broadlines retail analyst at J.P. Morgan, said there aren’t likely to be any big third-quarter surprises and that there was a quiet confidence building about the holiday season.
“Inventories as a whole are more or less in line and clean in the channel and that could be a positive for margins in the fourth quarter,” Boss said.
Arnold Aronson, managing director of retail strategies at Kurt Salmon, said retailers overall have held up pretty well considering the still-high rate of unemployment, volatile gasoline prices and political gridlock.
Aronson said there would be a chance for consumers to refocus after the election.
“We’re still a consumptive society,” he said. “There are a lot of people who might feel they have deprived themselves. The talk will be, ‘What are you shopping for?’ and ‘What’s the hottest?’ and ‘Who has the best prices?’ The conditions are going to be slowly but steadily improving.”
@pantone announced their Color of the Year 2018: Ultra Violet. Nearly 20 months after the musician Prince’s death, fashion is having a purple moment. Varying shades of purple appeared on spring or fall runways, from @christopherkane to @calvinklein. @gucci’s Alessandro Michele bathed his fall runway in ultra violet-colored light at one point. Pantone 18-3838 is meant to “push the boundaries of what inspires us to look upward and outward to the future.” #wwdnews #wwdfashion (📷: @kukukuba)
@badgalriri’s @fentybeauty launch in September was a massive success on social media, powering $72.9 million of earned media value, according to Tribe Dynamics. The brand’s foundation offering sparked conversations about diversity in beauty, launching the growth of emerging influencers and propelling the brand’s support on social media. Today, #fentybeauty won Launch of the Year at the WWD #BeautyIncAwards. (📷: Chema Moya/EPE-EFE)
@marianna_hewitt has become one of the most influential content creators in the beauty space, with almost 800,000 Instagram followers and a newly launched skin care line called @SummerFridays. Today, she was awarded Influencer of the Year at the WWD #BeautyIncAwards. (📸: @sophiachabbott )
As shopping behaviors evolve, the retail experience must follow. Head over to retail experts @colliersinternational’s Knowledge Leader series to read more about the shift in our shopping era. #colliersretail #lovecolliers
@prada opened a pop-up club, called Prada Double Club, in collaboration with German artist Cartsen Höller at @artbasel Miami. Last night, guests – including @youngparis, @ritaora and even Miuccia Prada herself – gathered in a former ice factory where the pop-up is housed for a performance from @wyclefjean. Go to WWD.com for full coverage on all the exhibits, parties and more at #ArtBaselMiami. #wwdeye (📷: @lexieblacklock)
@louboutinworld and @disney are making magic once again, creating a set of shoe designs for the release of “Star Wars: The Last Jedi.” Louboutin designed a pair of shoes for each of the film’s four female leads: Rey (@daisyridrey), Vice Admiral Amilyn Holdo (@lauradern), Captain Phasma (Gwendoline Christie) and Rose Tico (@kellymarietran). The shoes will debut on Saturday at the L.A. premiere of the latest episode. #wwdfashion
Today at the #BeautyIncAwards 2017, WWD will be joined by beauty leaders from around the world as we honor this year's most innovative people, products, brands and places. Follow along here and on Twitter for live coverage from the exclusive event. #wwdsummits (📷: @elizaflorendo)
Exclusive: Beauty superinfluencer @marianna_hewitt is launching her first-ever skin care brand with her business partner @laurengores. Their new line Summer Fridays, which will be sold exclusively at summerfridays.com starting in January, is launching with just one product – a hydrating cream Jet Lag Mask. “We wanted to focus on one product that was amazing,” said Hewitt. Read the full interview on WWD.com. Link in bio. #wwdbeauty #wwdnews
Michelin star-rated chef PJ Calapa marks his first solo endeavor with today’s opening of @scampinyc –– the new Southern Italian restaurant located in Manhattans’ Flatiron District. The upscale yet welcoming environment matches the menu, which includes two types of scampi: traditional Italian langoustines in butter and the Americanized version with shrimp over pasta 🍤 - pictured here. #wwdeye (📷: George Chinsee)