Macy's, Kohl's Crash After Reporting Abysmal Holiday Sales; Cut Guidance; Announce Mass Layoffs, Store Closures

Tyler Durden's picture

Remember when market cheerleaders said that holiday sales were expected to be far stronger than usual, if only as a result of the newly-discovered optimism from the Trump election? Well, at least when it comes to conventional retailers like Kohl's and Macy's... not so much.

First, it was Kohl’s, which announced it was slashing its full year forecast, and now sees FY2017 adjusted EPS of $3.60-$3.65, down from $3.80-$4.00 less than two months ago, in the day after the election (ronically). It wasn't just the future: the company revealed that comp sales were also down 2.1% y/y in fiscal months November and December combined.

As Kohl's CEO Kevin Mansell said, “sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December."  

But an even greater surprise was revealed moments later by retail belwether Macy's, which not only reported a drop in same store sales, not only slashed guidance, but also announced it would close 68 stores and lay off over 10,000 workers.

Specifically, in its press release, the company announced that not only is it cutting its full year EPS to $2.95-$31.0 from $3.15-$3.40, but also another massive layoff and store closure as part of its latest set of operational restructurings which include "actions to streamline its store portfolio, intensify cost efficiency efforts and execute its real estate strategy. These actions bolster the company’s strategy to further invest in omnichannel capabilities, improve customer experience and create shareholder value.:"

In a nutshell: Macy's said it would eliminate about 3,900 jobs with the store closings, which are part of a plan announced last summer that will close about 100 of Macy’s 730 locations. It also will eliminate about 6,200 other positions as part of an effort to streamline operations and reduce expenses so it can invest more in its digital operations. “We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape, as well as monetizing locations with highly valued real estate,” CEO Terry Lundgren said.

Macy's also announced an additional 68 Macy’s store closings (out of a current total of 730 Macy’s stores). Of the 68, three closed mid-year, 63 will be closed in early spring 2017 and two will be closed in mid-2017. Three other locations were sold, or are to be sold, and are being leased back. (A list of planned store closings, as well as store openings, is included at the end of this news release.) The company intends to opportunistically close approximately 30 additional stores over the next few years as leases or operating covenants expire or sale transactions are completed.

As a result of closing 63 Macy’s stores in early 2017, along with the three closed mid-year 2016, the company’s 2017 sales are expected to be negatively impacted by approximately $575 million. This reflects the company’s ability to retain sales at nearby stores and on through targeted marketing and merchandising efforts.

CEO Terry Lundgren's commentary on recent trends was about as dire as any heard recently:

“Over the past year, we have been focused and disciplined about making strategic decisions to position us to gain market share and return to growth over time. While we are pleased with the strong performance of our highly developed online business, as well as the progress we have made on selling and visual presentation programs and expense reduction initiatives in 2016, we continue to experience declining traffic in our stores where the majority of our business is still transacted. Given the overall trends challenging us and the broader retail industry, and the time needed to execute new strategies, we expect our 2017 change in comparable sales to be relatively consistent with our November/December sales trend."

So pretty bad then. Needless to say, the stocks of both companies are crashing in the after hours.


and Macy's

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I am Jobe's picture

Crap, single mothers are lining up to do some serious shopping. 

Raffie's picture

Nooooooooooooo not Kohl's. I go there sometimes...

Kprime's picture

yes, but you actually have to spend money. buying two triple discount items per year won't cut it.

froze25's picture

No middle class, no market for Macy's. It's that simple.

E.F. Mutton's picture

"Government do take a bite, don't she?" - Raising Arizona

847328_3527's picture

Kohls stores are still pretty nice where I live and they make a solid attempt at keeping stuff looking good.


Macy's has almost turned into a Ross-look-alike and even brags about catering to a lower end these days.

8 years of "Fundamentally changed America" and we see the result: destruction of the middle class consumer due to massive job looses and zero yield on savings accounts amonst other reasons.

But Dems and esp Soweeto and Hillary own this destruction 99%.

Son of Loki's picture

Where are people going to riot and brawl if they close these malls?

Arnold's picture

Our local Sears, not on the list, closing.

Tonight, Macy's right behind it.

Paintball Emporium to enter space.

Penny's needs to vacate for the Rogue 1 theme to work.

Antifaschistische's picture

Note to Macy's.  I went to your buy.  Memorial City Mall Houston....we don't wear suits any more to'm looking for more casual attire, but the selection looked more like it was for upscale wannabe hip hop guys. cool, no complaints about that, it's just not me.   The pant racks were quite disorganized...perhaps that's by design so I will keep searching and searching for my average size.  I don't.  I just leave.   and the guys there to "help"...are ZERO help.

Arnold's picture

Good Will is well organized for Menswear, by waist size.

JRobby's picture

Who would have seen a retail collapse coming?

Arrow4Truth's picture

It's what happens when people cease to consume.

Berspankme's picture

I buy winter clothes in the spring and summer clothes in the fall. always at least 60% discount. I'm not fashionable but I am cheap

kiwigal's picture

That's not cheap,that's smart. Online sales will be the death knell for a lot of retailers. 

Raffie's picture

Now and then they got nice shirts I like.

abyssinian's picture

"wow, we didnt' expect this, must be transitory or maybe because the weather was so warm this holiday season or maybe part of the country was raining? But we are pretty confident that things will start to boom if the weather is going to warm up in the spring time"  Uncle Yellen.

Amalgamated Tang's picture

Macy's coffers are almost as empty as Macy's Parade balloons

cowdiddly's picture

Should'nt have dropped the Trump ties and Ivanka handbags. Dumb and Dumberer

My crazy wife went through her entire "walk-in" closet and found 2 pairs of Ivanka shoes and an Ivanka coat/ jacket. Now she says she is gonna save em. LOL I don't know what for, she has more shoes than Imelda Marcos now.

Don't know how she got em because she dang sure did'nt buy them when I was with her. She somehow "acquires" things when Im not around. Ha

After 32 years, ya just learn to deal with it and act like you don't see.


abyssinian's picture

Macy's firing 10,00 workers, that means 20,000 waitering jobs created cause 10,000 unemployed workers will have two waitering jobs in 2017!  Bullish!

847328_3527's picture

A giant wave of store closures is about to hit the US

He said he's expecting a number of retailers to file for bankruptcy next year, in addition to mass store closures.

Nearly every major department store, including Macy's, Kohl's, Walmart, and Sears, have collectively closed hundreds of stores over the last couple years to try and stem losses from unprofitable stores and the rise of ecommerce.

 "yes we can!"


Lorca's Novena's picture

And, those were mostly part time jobs that Obola claimed were "Jobs"... whats he gonna say now?  " Uhh emm, muh fellow murricas. we be makin new rulz so it be like dis yo, if you waz lade off, dats a job too. Uhh, emmm, erry murrica datz out of work due to da economy and shite, will have a new full time jerb, cuz i sayz so."


*Those new jobs will require the recently laid off to either work directly for Mr. Soros, or go to the front lines against Russia.

2017 DHS memo #666

knukles's picture

And that's with Mr Trump's election.
Imagine without
Green Shoots

847328_3527's picture

Even though he's making America great Again, creating jobs, negotiating deals that favor Americans and putting Americans first....never ever forget that he called someone fat 18 years ago and Clooney said, "He'll never be president" as he snickered on stage.


Seasmoke's picture

There we go !!!!  No one alive will convince me this wasn't the weakest retail Holiday season ever. I never saw anyone in the stores all of December !!!!

Kprime's picture

I would not know either way.  I did zero shopping in December.

847328_3527's picture

We no longer go to most of the mawls around since they stopped putting up Christmas decorations so they "don't offend anyone" according to the lady in the mawl offices.

Screw them! This is freaking America and everyone I know, Christians and Jews alike enjoy all the stuff and fluff of Christmas so who are they worried about? Even the didnus and illegals love Christmas.

So screw them. We decied at work and a few clubs and bridge clubs I play at to patronize ONLY stores that had Chistmas decorations. It's an American tradition and if mawls and stores (like Neeman Mucous) want to pander to some small fringe group to pleeze the muzzie in charge Soweeto, then screw them. We see where their management is taking them anyway (downhill) as massive mawl bankruptcies are flooding the economy both last year and more this year.

Plus, we did 90% of any shopping online anway.


oberonsbane's picture

Mawls? Did you mean malls or mauls maybe? DOn't know where you live but I get sick of seeing all the decorations. To me they are all just disctrating eyesores. Especially at night. I can't tell which is an xmas light or a brakelight.

Vinividivinci's picture

I made a point of wishing a " Merry Christmas" to
anyone and everyone...sick of the generic and safe
"Happy Holidays".

SDShack's picture

Went to the MalWart couple of days before New Years Eve mainly looking for Xmas candy 1/2 off. Was shocked to find over 2 solid aisles (5 display sides total, each about 50' long) of Clearance Xmas Junk. Mostly decorating crap, lights, etc, and a little candy. Never seen that much leftover Chinese shit that long after Xmas before. But the 99 Cent and Goodwill Stores I went to a few days before Xmas were packed. I've noticed this trend at the dollar and thrift stores going on about 3 years now. Jibes with when 0zer0care really started to pinch. Masses just can't afford retail when working part time and struggling to pay for increased food, rent, transportation and healthcare.

oberonsbane's picture

Hows that 35 years of trickle down economics working for ya?

Bobbyrib's picture

You didn't get the Putin and Trump love memo? Blame Obama!


Whatever you do, don't blame Wall St and the financialization of our economy../sarcasm.

Arnold's picture

You  two useless guys are anorexic and starving, Right?

Arrow4Truth's picture

Went to San Antonio on the 22nd and noted how empty the stores were on the 23rd and Christmas Eve. Ten years ago it was madness, even though the population there now is 14-15% higher.

Squid Viscous's picture

what time does Cramer come on the joob tube?

E.F. Mutton's picture

I'm surprised Macy's or Kohl's wasn't a Cramer RED HOT BUY!!


Muad'Grumps's picture

I'm amazed they've kept the Macy's by house open for so long. There is simply no traffic no matter what time of year.

TeethVillage88s's picture

Obama and Yellen told me to invest in Macy's and Kohls!

ne14truth's picture

My wife and I were at the local mall around 12/22, it has a Macy's....typical mall....I noticed there were quite a few people in the mall but I also noticed hardly no one had a bag in there hand.....I pointed it out to my wife, I mean there was thousands of people in there wandering around, but no one had a bag with anything they purchased in their hands. It was odd looking once I noticed it, no bags of stuff anywhere, just people wandering around looking bored.

booboo's picture

LIke old soviet republics, people looked but could not buy.

Vinividivinci's picture

Same here in shithole Montreal.
Also, just noticed two major downtown malls had
less than a 50% rental rate...they try to camouflage
the empty storefronts with huge banners to hide them
but the malls still felt like cemeteries.

WillyGroper's picture

homeless, trying to stay warm.


everlearner's picture

I haven't been to a mall since last Xmas season, but it was the same thing here in MA... mostly were kids walking around, boys meet girls (or should I say ze meets ze). not much shopping...

I think they were there because they didn't have anything else to do... better than being stuck all day at their parent's basement I guess...

zagzigga's picture

Maybe they were in the mall to do some walking. I do the same - the mall is nice and warm to walk in, unlike the outdoors.

StychoKiller's picture

Right now, it's a balmy -1° here in SW Minnesota (not including wind chill!)

rejected's picture

Sears, K-Mart, Macy's, Kohl's,,,, and the rest are going in the shitter. Thank you Obama, Bush, Clinton for this spectacular economy!