While results in this sector are often a mixed bag, this quarter’s “lows” seem to be much lower than expected. Ascena group reportedly will shut down is Dressbarn business, after several years of poor performance despite concerted efforts to invest in the business; Kohl’s disappointed with sales well below expectations, while JCPenney continues to struggle. Urban Outfitters squeaked out a small comp on top of a stellar 2018 performance, while expectations are not high for L Brands or Gap’s performance.

Common themes throughout each retailer’s comments were poor weather, tariffs (both current and future), and executional missteps

JCPenney’s struggles of late are well documented. While it is chipping away at improving issues like shrink and unproductive inventory, sales were down more than expected, dropping 5.5% compared to last year, and its net income swinging to a loss compared to the same period. The retailer cut inventories by 16%, including “hundreds of thousands” of drop-ship SKUs online which had virtually no effect on topline sales. This change indicates there is still much to improve operationally in the coming months.

Kohl’s sales took an unexpected plunge as well, with comps down 3.4% and sales dropping 2.9%. This came as a surprising blow after the announcement that it would extend its Amazon returns program to all stores this year. Slow home sales, weather, and underperforming promotional events took the brunt of the blame. This slower than anticipated start has caused the retailer to trim its outlook by 10% for the year.

Nordstrom also took an unexpected tumble with comps down 3.5%, more than expected. Key pain points were negative impacts from executing its Nordy Club loyalty scheme, and imbalances in both digital marketing investments and assortment. The majority of the decline came from full-line operations, slightly offset by a 7% growth in digital sales. The slowdown caused Nordstrom to take a much more conservative approach to its outlook, lowering it from +1% to +2% comps. To 0 to -2% comps for the year.

Macy’s results were right on track, with sales dipping just slightly, while eking out a positive comp against a strong comparable period in 2018. Its Backstage and in-store pickup initiatives are working well while new strategies, including STORY, destination business, and the Growth 150 stores are just launched, or works-in-progress the retailer has high hopes for.

Meanwhile, TJX continues its remarkable stride of growth with positive comps of 5% and sales up 7%. Comps continue to be driven by increased traffic while new stores continue to open consistently. Its Marmaxx banners lead the way while Homegoods posted a modest 1% comp. TJX’s outlook remains both positive and unchanged.

Stay tuned for a more in-depth look at each retailer’s performance and outlook, and don’t hesitate to reach out with any questions: tiffany.hogan@kantar.com.

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