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Will Macy’s and Its Peers Rejoice This Holiday Season?


Dec. 4 2020, Updated 10:52 a.m. ET

Positive indicators

The holiday season comes in the fourth quarter of the fiscal year for department stores. It’s their most important selling season, followed by back-to-school shopping.

According to data released by the NRF (National Retail Federation) on December 14, 2016, retail sales rose 5.0% on a year-over-year basis in November. The NRF’s holiday shopping season includes November and December. NRF chief economist Jack Kleinhenz attributed this rise to the combined impact of job and wage gains.

Based on November sales numbers, the NRF is optimistic that retail sales for the 2016 holiday season will meet or exceed the holiday sales estimate of a 3.6% rise year-over-year.

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Holiday season estimates

The NRF’s estimate of a 3.6% rise in retail sales excludes automobiles, gasoline, and restaurant sales. It expects retail sales this holiday season to be $655.9 billion. That estimate is higher than the 3.2% growth rate in the 2015 holiday retail sales.

The NRF holiday survey is conducted by Prosper Insights & Analytics. According to an updated survey released on December 16, 2016, the average holiday shopper in the United States has completed 52.5% of his or her shopping. That compares to 53.5% in the previous year.

According to NRF survey results, the top three destinations where last-minute shoppers plan to purchase their gifts are online (52.0%), department stores (42.0%), and discount stores (27.0%).

The fourth quarter, which includes the holiday season, accounts for the highest proportion of sales for department stores compared to other quarters. For Kohl’s (KSS), a mid-tier department store, the holiday season usually accounts for 30.0% of its annual sales, followed by the back-to-school season, which contributes 15.0% to its annual sales.

In recent quarters, sales of department stores have been adversely impacted by stiff competition from online retailers such as Amazon (AMZN) and off-price retailers such as TJX Companies (TJX). For fiscal 4Q16, analysts expect Kohl’s, Macy’s (M), Nordstrom (JWN), and JCPenney (JCP) to deliver sales growth of -1.0%, -1.5%, 4.3%, and 2.5%, respectively. These four department stores account for 5.7% of the SPDR S&P Retail ETF (XRT).

In the next part of this series, we’ll see how crucial online channels are doing when it comes to holiday shopping.


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