TOP RETAIL BRANDS OF THE YEAR ANNOUNCED

The 2016 Harris Poll EquiTrend Retail Brands of the Year study results were announced, with several retailers getting high points for engaging customers. For the fourth straight year, 2 brands took top honors in their segment categories: The Home Depot for hardware and home brand of the year, and Kohls.com as online department store of the year.

Other top winners included Macy’s as department store of the year, Nordstrom as luxury department store of the year, TJ Maxx as off-price retailer of the year, Best Buy as electronics store of the year, DSW shoes as discount shoe store of the year and Cabela’s as sporting goods store of the year.

Within retail, hardware and home store was the top ranked category, with baby boomers and GenX shoppers driving that, investing in home improvements and moving up from starter homes. 

Over 97,000 US consumers rated more than 200 retail brands for the survey. The scores take into account familiarity, quality and purchase consideration.

Source: Chain Store Age

APRIL RETAIL SALES REBOUND. WILL RETAILER STOCKS RECOVER?

Wall Street analysts are calling last week “Retail Wreck” due to numerous retailers’ news of poor sales, profits and future outlook on consumer spending. April retail sales came in higher than expected with a positive 1.3% gain, the highest gain in a year. Will strong sales in the first month of the second quarter help with a stock rebound for retailers?

Last week’s poor results were reported by many retailers, including Macy’s, Kohl’s and Nordstrom’s. Department stores are also responding to the strong online sales versus in-store that was reported, with online sales soaring 10.2% over last year. They are struggling with putting inventory in the right place to meet their increasingly complicated inventory and distribution demands.

Investors are waiting for home-improvement results this week from Home Depot, Lowe’s, Target and Wal-Mart to try to determine if the profit misses in the retail space is a problem just for department stores and apparel makers, or if it is a broader problem ahead for the consumer-driven US economy.

See the Accelerated Analytics’ blog from last week, reporting on the stock decreases across several retailers and apparel manufacturers: http://www.acceleratedanalytics.com/blog/2016/5/12/retail-stock-market-was-a-bear-yesterday-dropping-to-worst-l.html and continue to monitor our blog http://www.acceleratedanalytics.com/blog/ page this week as additional retailers report on Q1 results.

Sources: The Wall Street Journal, USA Today

UPSCALE COSMETICS SALES ARE BEAUTIFUL

The upscale beauty business continues to shine. In 2015, prestige beauty - makeup, fragrances and skin care products that are not found typically at drug stores, saw a 7% increase in sales. Sephora and Ulta each posted phenomenal sales results. Estee Lauder raised its sales forecast as demand for their product line are growing. The makeup subcategory was the strongest, with a 13% increase last year.

In a “selfie-ready age” and YouTube and Pinterest an easy way to get product tutorials, makeup trends are growing the sales. Thicker eyebrows are trendy, so products such as brow-enhancing serum and eyebrow mousse are becoming more popular. In our health-conscious society, products with natural or clinical orientation, which are pricier, comprise the largest share of prestige skincare sales.

JC Penney plans to accelerate its Sephora Inside JC Penney locations, and Kohl’s has redesigned its beauty area on 900 of its stores. Macy’s acquired $210 million Bluemercury, and plans to grow to 150 locations in the next 2 years. Target acquired Sonia Kashuk brand, and L’Oreal is opening brick-and-mortar locations of its NYX Cosmetics concept.

Accelerated Analytics works with a large percentage of beauty brands, such as L’Oreal, Anastasia Beverly Hills, Estee Lauder, Parlux Fragrances and LVMH. Click here to see our full list of beauty vendors, who utilize Accelerated Analytics’ POS reporting tools to track sales and inventory levels at their retailers, such as Dillard’s, Macy’s, Sephora and Ulta.

Source: Washington Post

ULTA SHOWS HOW ATTRACTIVE THE BEAUTY MARKET CAN BE

Ulta Salon, a specialty beauty retailer, is expanding its store count across the U.S. while reporting a 12.5% same-store sales increase during the fourth quarter. There were several factors attributed to their performance. Ulta’s gross margins got a lift by their shift from coupons to more targeted offers. They also managed to boost traffic into the stores. They added 100 new stores in 2015, seeing net revenues increase 21% to reach $1.27 billion. With its plans to add 100 more stores in 2016, taking them to over 1,000 stores total, it will build on its success in small markets and downtown/urban locations.

The beauty segment is attractive to department store retailers, because shoppers make frequent repeat visits when they run out of a certain product. Several retailers, such as Kohl’s and Sephora-Inside-JC Penney’s, have specific plans to expand their beauty departments.

Accelerated Analytics’ has a broad base of beauty vendor customers, such as L’Oreal, LVMH, Parlux Fragrances, Anastasia Beverly Hills, Chanel, Coty, Estee Lauder and more. Learn about our beauty industry reporting solutions at http://www.acceleratedanalytics.com/beauty/

Source: CNBC

OMNI-CHANNEL SWITCHEROO: ONLINE RETAILERS GET PHYSICAL WHILE RETAIL STORE STALWARTS SHRINK

Amazon.com opened its first brick-and-mortar store in Seattle in November, and announced plans to open another store in San Diego. Macy’s announced it is shutting down almost 40 stores this year. Kohl’s plans to follow suit and close 18 stores, stating its online sales increased 30% in the fourth quarter, causing their reevaluation of its store footprint. Similar announcements of closing stores were also made by Sears, JC Penney and The Gap, as 8% of total US retail sales are now online.

Companies that began their retail lives online, such as Athleta, Fabletics and Birchbox are now adding brick-and-mortar stores. They are moving into prime real estate that was once reserved for top-performing retail stores, such as Birchbox opening its first store in Manhattan.

Is this the new evolution of retail, blending the two worlds? Experts say the trend will continue to grow. The impact will be different in each retail category, such as electronics versus clothing. "For most products, consumers actually prefer to shop in store because they want to see and touch what they're buying," said Dave Parro, vice president of the retail technology practice at Walker Sands, a PR marketing firm. "But they also shop online regularly because of the convenience and range of products available."

The winners of the switcheroo? The consumer. Those who are omni-shoppers know which retail channel and retailer is best to fit their needs.

Source: Philly.com, WSJ

NORDSTOM IS RANKED FAVORITE RETAILER IN RECENT SURVEY

A survey of over 5,700 consumers found that Nordstrom ranked first among retailers in customer satisfaction. It specifically ranked highest scores for atmosphere, checkout speed and finding the correct size/product the customer was looking for. One in five customers surveyed indicated they were dissatisfied in general with their fashion retail experience across all retailers. 40% of these customers indicated that the sales experience was very important to them, and that less than half of them were approached by a sales associate, which was key to their satisfaction. Nordstrom’s sales associates assisted customers the most and received the highest satisfaction scores.

Coming in behind Nordstrom were Marshalls, H&M, Ross, Kohl’s and Macy’s.

With merchandise selection and ease of finding items and size selection the top of customers’ needs, retailers and vendors recognize the importance of partnering to share point of sale and inventory data in order to optimize store assortments. Many vendors, such as Brahmin Leather, Anastasia Beaute and The Sak, utilize Accelerated Analytics to monitor and act on inventory levels and customer buying patterns in Nordstrom and other retailers to maximize their effectiveness in this area.

Source: Chain Store Age

KOHL’S, DILLARD’S AND NORDSTROM’S REPORT ON Q1 RESULTS – NORDSTROM REPORTS HIGH LOYALTY PROGRAM SUCCESS

Kohl’s, Dillard’s and Nordstrom’s released Q1 sales results yesterday, on the heels of announcements of Q1 losses from JC Penney and Macy’s.

Despite launching a loyalty program and expanding advertising, Kohl’s reported weak consumer spending, but did report a gain. Kohl’s reported a profit of $127 million, up slightly from $125 million a year earlier. Sales grew 1.3% to $4.2 billion. Kohl’s operated 1,164 stores this year versus 1,160 last year. Kevin Mansell, Kohl's chairman, chief executive officer and president, said: "Sales were modestly below our original expectations for the quarter, but accelerated in the March/April combined period after a weak February. We are very pleased with our earnings results, with a more balanced promotional calendar driving merchandise margin combined with strong expense control."

Dillard’s reported Q1 sales at $109.6 million compared to $111.7 million prior year. Same store sales decreased 1%. Net sales were $1.574 billion, up 1.5% from last year. Sales were strongest in junior’s and children’s apparel, followed by shoes and ladies’ apparel. Sales were weak in the home and furniture category. The company noted that sales in Texas were below company average for Q1. "We are disappointed with our first quarter performance. Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth," said Chief Executive William Dillard. "Although inventory is higher than we would like, we believe the levels are manageable."

Nordstrom’s also reported a drop in earnings for Q1. It reported a profit of $128 million, down from $140 million a year ago. However, Nordstrom.com and NordstromRack.com had a combined 70% increase in sales. Net sales increased 9.8% and same store sale increased 4%. Nordstrom’s loyalty program contributed greatly to its results. Members shopped 3 times more frequently and spend 4 times more on average than non-members. With 4.4 million members, sales from members increased 11% in the first quarter and represented 38% of sales.

Source: Retailing Today

CONSUMER SATISFACTION WITH RETAIL IS ON A DECLINE

The American Consumer Satisfaction Index (ACSI) reports that consumer satisfaction with retail is on the decline for the first time in four years.

The ACSI report states brick-and-mortar customer satisfaction fell flat or weakened, while Internet retail is up from last year. By category, overall satisfaction with department and discount stores stayed flat at 77, while the gap between best- and worst-ranked companies grew. Nordstrom was the top rated, gaining 4% to 86. They are followed by Dillard’s (81), Kohl’s (-1% to 80) and Macy’s (79). Walmart dropped 4% to 68 and is at the bottom of the category behind Target (+4% to 80), Meijer (78) and Sears (-5% to 73).

Among home improvement chains, Lowe’s rated best at 81, while Home Depot falls to the category’s bottom dropping 4% to 76.

Amazon remains at the top of the Internet sector, at 86. Netflix improved for the third straight year gaining 3% to 81. Overstock and eBay both dropped to 77 and 79, respectively.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the US. The ACSI uses data from 70,000 customers annually for measuring satisfaction with more than 230 companies in 47 industries.

Resource: Retailing Today

WHICH RETAILERS' MOBILE APPS ARE THE MOST SUCCESSFUL WITH CONSUMERS?

Retailers need to figure out how to keep shoppers engaged with their mobile apps so they come back and shop for more, instead of downloading an app, using it once, and then forgetting it or deleting it.

In a recent panel of 250,000 US and 2 million global app users, an engagement measurement of monthly active users (users who shop an app at least once a month) who shop an app at least once a week indicated which retailers rank the highest.

Apps with the highest engagement levels include Neiman Marcus (64.3%), Kohl’s (63.6%), Victoria’s Secret (61.7%), and Groupon (47.8%).  Kohl’s success is attributed to doing a great job highlighting discounts, coupons and deals of the day.

Belk Inc. also has a high level of app engagement with 32.4%. Mobile apps are becoming much more important as digital commerce evolves,” says Ivy Chin, senior vice president of e-commerce and omnichannel digital at Belk. “Our shopper often uses her mobile device to complement her in-store experience, so we developed the Belk app to support that, with easy bar code scanning, coupon integration with Apple’s Passbook wallet, a Belk store finder, integration of e-mail, and social sharing.”

Resource: Internet Retailer.com

“It’s true that retailers have yet to fully make use of location in mobile commerce, but you have to do location right,” Chin says. “Location awareness has to be meaningful for customers and give them the right information and the right messages. This involves understanding how your customers engage with your brand whether they are in-store, online or on a mobile device—a 360-degree view of your customers.”

Impact of Strong U.S. Dollar for Domestic Retailers

A strengthening U.S. dollar works well for retailers who are almost exclusively selling in the U.S. and buying their product abroad. Jan Kniffen, CEO of J.Rogers Kniffen Worldwide Enterprises, spoke on CNBC this week about the effect a stronger U.S. dollar will be for retailers. “Retailers who only sell here but buy in other countries will benefit the most. Who are we talking about? Dollar Stores, Macy’s, Target, Kohl’s, J.C. Penneys.”

The main benefit for these retailers is that they purchase product from other countries and re-price product each time they place an order, so orders are less expensive each time the U.S. dollar grows stronger.

The same retailers who benefit from falling U.S. energy costs will benefit from the strong U.S. dollar. “The domestic retailers who are not high end and more middle market will benefit from falling gas prices as their customers have more money to spend.”

Source: CNBC

Kohl's Misses Earnings Estimates

November 13, 2014

Kohl's is heading into the holidays with a loss of momentum after third quarter same store sales declined 1.8% and the company missed analysts' earnings estimate by four cents.

The third quarter comp decrease of 1.8% was on top of a prior year decline of 1.6%.  Total sales at the operator of 1,163 stores declined slightly to $4.37 billion from $4.44 billion.  Net income declined to $142 million, or 70 cents a share, from $177 million, or 81 cents a share.

The 1,163 stores Kohl's operated at the end of the quarter was five more units than the company had in operation at the end of the third quarter the prior year.

Source: Retailing Today

Kohl's Lowers Outlook As E-comm Advances

October 29, 2014

Weaker than expected third quarter sales prompted Kohl's to lower its profit forecast while noting that e-commerce sales increased 30%.

The company held an investor conference on October 29 and said third quarter sales were expected to decline 1.4% due to softer than expected sales during October.  The top line weakness caused the company to confirm that profits would be at the lower end of a previously forecast range of $4.05 to $4.45 a share.

While the overall forecast for the third quarter is for a decline, the company expects the children's category to report comparable sales increases for the quarter.  Accessories, footwear and men's are expected to report lower sales, but to outperform the company average.  Meanwhile, home and women's are expected to underperform the company average.

Kohl's currently operates 1,163 stores in 49 states.

Source: Retailing Today

Kohl's Optimistic On BTS After Weak 2Q

August 14, 2014

Kohl's exceeded analysts' profit expectations in the second quarter, but it wasn't due to top line strength and now the company has a lot riding on the back-to-school season.

The company's sales for the second quarter ended August 2 declined to $4.242 billion from $4.289 billion and same-store sales fell 1.3% after a slight prior year comp increase of 0.9%.  Meanwhile, net income increased slightly to $232 million from $231 million, while earnings per share advanced 8.6% to $1.13 from $1.04, five cents better than analysts' forecasts.  The earnings beat was driven by expense control and increased share repurchase activity, which reduced the number of outstanding shares.

Undeterred by the sales decline and weak underlying profit performance, Kohl's chairman, president and CEO Kevin Mansell focused on improvements late in the quarter and the company's positioning for back-to-school.

"We are pleased with the improvement we saw in sales as the quarter progressed," Mansell said.  "The improvement was the most dramatic in the month of July where we achieved a positive comp.  As they consistently do, our teams did a great job of managing expenses throughout the quarter.  We enter the back-to-school season with fresh, new inventory and encouraging momentum."

Kohl's increased its store count by five units during the quarter to end the period with 1,160 stores in 49 states.  Four new Kohl's stores are expected to open this fall.

Source: Retailing Today

Kohl's Stays Firm On Outlook Despite Weak First Quarter Sales

May 15, 2014

Kohl's joins a growing list of retailers whose first quarter results took a hit from a severe and extended winter.  Despite missing estimates, the company is staying firm on its guidance for the full fiscal year.

The company reported net sales for the quarter of $4.07 billion, a 3.1% decrease from $4.2 billion for the prior-year quarter.  Comparable store sales decreased 3.4% in the quarter compared to a 1.9% decrease in the prior-year quarter.  Net income was $125 million for the quarter, a drop of 15% from $147 million in the prior-year quarter.  Diluted earnings per share fell 9% to $0.60 from $0.66 in the prior-year quarter.

"We did not achieve our first quarter sales goals, but we were encouraged by the improvement in sales as the quarter progressed," said chairman, president and CEO Kevin Mansell.  "Our teams managed our inventory levels appropriately and expenses were controlled throughout the organization during the quarter."

The company still anticipates diluted earnings per share of $4.05 to $4.45 for fiscal 2014, which is consistent with its previous guidance.

Kohl's ended the quarter with 1,160 stores in 49 states, compared with 1,155 stores at the same time last year.  The company opened four new store locations, relocated one existing store and permanently closed two stores during the quarter.

Source: Retailing Today

Kohl's Lowers Fourth-Quarter Guidance Following Weak January Sales

February 6, 2014

Kohl's January sales were significantly lower than planned as a result of lower traffic and low levels of clearance merchandise.  Comparable-store sales decreased 2%.  Combined November and December same-store sales increased 0.8%.

Unanticipated expenses in servicing its e-commerce business led to higher-than-expected costs for the quarter.  As a result of these expenses, the company is lowering its fourth quarter diluted earnings per share estimates from $1.59 to $1.74 to approximately $1.53.  Fiscal 2013 diluted earnings per share are now expected to be approximately $4.03, compared to previous guidance of $4.08 to $4.23.

The company will release its detailed report on the fourth quarter February 27.  Kohl's operates 1,158 stores in 49 states.

Source: Retailing Today

Kohl’s Corp. Hires Starbucks Marketing Executive Michelle Gass

Kohl’s Corp. has hired Starbucks’ Michelle Gass, the executive responsible for developing the then new Frappuccino into a $2 billion a year business that makes up one fifth of Starbucks sales.

The move is part of Kohl’s strategy to recapture the growth it enjoyed in the 1990’s and early 2000’s. "We probably got a little complacent and I think there was too much sameness," said chairman, CEO and President Kevin Mansell in an interview last week.  A difficult Christmas selling season in 2011, followed by inventory problems the following spring — Kohl's missed big on colored denim, for example — reinforced the need for change.

"We completely re-invented our merchandising leadership — our buying, our planning and our product development," Mansell said. "We completely re-engineered our information technology area with new leaders."

As "chief customer officer," Gass will oversee the critical marketing function, the company's rapidly growing e-commerce business and what retailers have taken to calling the "omni-channel" approach — a blending of Internet and brick-and-mortar shopping.

"She knows the Kohl's brand," Mansell said. "She's a mom. She understands the store. She understands the brand. She understands the challenge. She's executed something similar to what we need to do here."

Kohl's Digital Signage

I was shoping at Kohl's this morning and was somewhat surprised to see they are using digital price signs on all thier fixtures and racks.  I haven't been into a Kohl's for at least a year so I'm not sure if these are new or have been around a while.  Although the geek in me loves to see in store technology like this the business guy in me wonders what the ROI is on digital signs in a dept store.  I would be very interested in any commentary anyone would like to offer in regards to the installation price and payback on digital price signs vs. traditional paper tickets.  I can see the application in a grocery store where prices change frequently but in a department store I'm just not sure.

Department Store Players Largely Strong In July

Helped by hot weather and clearance sales, many retailers reported solid results in July, a month that can be slow leading up to the back to school shopping season.  Some of the strongest showings in the month were in the department store category, as all those reporting showed July gains.  

Macy's led the pack with a 4.1% same-store rise in sales.  Total sales increased 5.1% to $1.7 billion over the four-week period.  "Despite some challenges from a sluggish macroeconomic environment and a temporary disruption of sales from the remodeling project at our Herald Square flagship store in New York City, the spring season met our expectations," said Macy's president and CEO Terry Lundgren.

Kohl's reported a lesser 1.7% gain in same-store sales, with total sales up 3.4%.  "We are pleased with the improvement in July's comparable store sales," said Kevin Mansell, president and CEO.

Other department store July results include: Nordstrom same-store sales edged up 0.9%; Saks increased 3.5%; Bon-Ton Stores rose a slight 0.1%; and Stage Stores gained 5.3%, beating the 2.2% rise expected by Wall Street.

Source: retailingtoday.com

Macy’s and Kohl’s post disappointing results in June

Analysts expected 18 top retail chains to report modest gains in June, as high unemployment and falling consumer confidence have taken a toll on spending.

Among the department store retailers reporting June same-store results so far, the results were largely mixed. Macy’s was among the retailers reporting sales that fell short of estimates. Same-store sales rose 1.2% in June, missing Wall Street’s projected 1.9% gain.

“June sales were below expectations,” said Terry Lundgren, chairman, president and CEO. “In part, this was a function of a macroeconomic environment that is stagnant at best, and lower spending by tourists in cities such as New York. Additionally, the unprecedented renovation at Macy’s Herald Square in New York City, the world’s largest store, is well under way but created more short-term business disruption than anticipated in the June sales period.”

Macy's and Bloomingdale's generated total revenue in June of $2.41 billion, representing a slight 0.8% gain.

Kohl’s Corp. was also challenged in June, reporting a same-store sales decline of 4.2%, after Wall Street had forecasted just a 3.2% drop. Total sales for the month decreased 2.6%.

“Though June sales were again lower than expectations, we are encouraged by improved sales in the latter weeks of the month as we continued to build inventory levels,” said Kevin Mansell, president and CEO.

Among other department store retailers reporting so far, Nordstrom same-store sales rose 8.1% in June, solidly beating Wall Street’s expected 4.7% gain, Saks rose 6%, surpassing the forecasted 4.7% rise and Bon-Ton Stores same-store sales dipped .8% in June.

Source: retailingtoday.com

Kohl's earnings slip, comps up in Q1

Despite dropping from the previous year, Kohl's said its net income for the first quarter ended April 28 was in line with its expectations. The company reported net income of $154 million (63 cents per diluted share) compared with $201 million ($0.69 per diluted share) a year ago. Net sales were $4.2 billion, an increase of 1.9% for the quarter. Comparable-store sales for the quarter increased 0.2 percent.

Kevin Mansell, Kohl’s chairman, president and CEO, said, “Our first quarter results reflect the implementation of our strategy to initiate lower pricing in order to provide greater value to our customers. This planned action led to significantly lower gross margins for the quarter. Strong management of expenses allowed us to achieve our earnings goal for the quarter. We have accelerated new receipts into second quarter to ensure we are well-positioned from an inventory perspective for the back-to-school season. The combination of these two actions should allow us to greatly improve our sales for the fall season.”

Kohl's ended the quarter with 1,134 stores in 49 states, compared with 1,097 stores at the same time last year. The company opened nine new stores, including one relocated store, and closed one store during the quarter.  Plans are to open approximately 10 more stores in the fall season and to remodel approximately 50 stores in 2012.

For the second quarter, Kohl's expects earnings to range from 96 cents to $1.02 per diluted share. The guidance is based on total sales growth of 2% to 3% and comparable-store sales growth of flat to 1% and includes expected second quarter share repurchases of $250 million. The company maintains its previously announced fiscal 2012 guidance of $4.75 per diluted share.

Source: retailingtoday.com