Retailers Kohl’s, Macy’s and Dollar General Have Released Their Earnings and It’s a Mixed Bag
Key takeaways
- Kohl’s had a surprise earnings beat with solid profit after a disappointing previous quarter
- Dollar General saw its biggest stock drop in seven years as it downgraded its full-year sales and earnings forecast
- Macy’s slashed its revenue and earnings guidance, stock dipped 7% but recovered
It’s been a tough time for retailers, as a difficult economic environment has slashed household spending to the necessities only. We’ve seen three recent earnings reports from household retail names, but it was a mixed picture across the board, which left investors wanting more from the big brands. We’ve got the details below.
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How are retailers faring?
While the tech market continues to ride the wave of its AI boom, other areas of the economy are struggling to draw customers in and maintain a profit. Here are the companies that recently shared their earnings reports.
Kohl’s
We’ll start off with the good news: Kohl’s had a great run last week when it revealed a surprise profit for its fiscal Q1, battling back from an unexpected loss the previous quarter. It reported earnings of 13 cents a share when analysts anticipated a loss of 43 cents.
As a result, Kohl’s share price skyrocketed by 16% in a day after the retailer confirmed it was sticking with its full-year guidance. The stock is still down 21% in 2023, with the stock also garnering more short interest in recent months.
Dollar General
The discount store suffered heavy losses on the stock market on Thursday after Dollar General slashed its sales and profit predictions for the year, citing inflation troubles and sluggish sales for the year so far.
Dollar General shares were down as much as 20%, the most significant drop the stock has seen in seven years, as the CEO Jeffrey Owen blamed a mix of factors including bad spring weather and lower tax refunds. Dollar General believes earnings per share for the year ending January 2024 will now be between an 8% decline and flat, versus the previous 4% to 6% growth forecasted.
As a result, several analysts have downgraded the stock, though the share price did show signs of life on Friday by gaining 1.79%.
Macy’s
The upmarket department store slashed its full-year forecast after it announced revenue of $4.98 billion versus the $50.4 billion predicted but was up on earnings per share of 56 cents instead of the expected 45 cents.
For the year it expects earnings per share of $2.70 to $3.20, which is a huge downgrade from the $3.67 to $4.11 guidance issued. The share price slumped 7% at the news but has recovered on Friday.
The bottom line
The retail sector is sounding the alarm for investors on sales and revenue, but eliciting different reactions from analysts and traders depending on what part of their earnings beats aren’t up to scratch. We’ll likely see further gloomy outlooks for the sector as inflation remains sticky and a potential recession is on the cards.
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