Shares of department store chains Macy’s Inc. and Kohl’s Corp. tumbled on Thursday as the companies reported a drop in quarterly same-store sales, stoking concerns that their turnaround may still be a long way off.
While the declines in same-store sales were not as bad as feared, gross margins at both the companies slipped as they continued to rely on discounts and promotions to woo customers back to their stores.
Macy’s gross margins fell to 40.3 percent from 40.9 percent a year earlier, while those of Kohl’s fell to 39.4 percent from 39.5 percent.
A beat was pretty widely expected, but the longer term concerns of department stores in secular decline remain unresolved, Susquehanna analyst Bill Dreher said.
“Negative comps still reflect market share losses, most likely to off-price retailers TJX Cos. Inc. and Ross Stores,” Dreher said.
Sales at stores open more than 12 months fell 2.5 percent at