U. s. department stores steady profitability boat even as sales slide by reuters
CHICAGO (Reuters) – U.S. Data recovery austin department store chains, hit by slowing sales for more than two years, have used layoffs, store closings and cutbacks to maintain one aspect of stability: profit margins.
An analysis of two important indicators of retail profitability, gross margins and operating margins, shows retailers like Kohl’s Corp (N: KSS), JC Penney Co Inc (N: JCP), Macy’s Inc (N: M) and Target Corp (N: TGT) have done a better job at delivering on profitability than maintaining sales growth.
This has given some investors hope for a recovery in a sector battered by the rise of online shopping led by Amazon.com Inc (O: AMZN), and competition from off-price chains like TJX Cos (N: TJX) and fast fashion retailers like Inditex’s Zara.
“Margins have been relatively better compared to sales and they are finally taking important steps like closing unprofitable stores,” said Charles Sizemore, founder of Sizemore Capital Management LLC, who owns shares of Wal-Mart Stores Inc (N: WMT) and other retailers. Data recovery micro sd card “The story right now is bad but we do expect some of these problems to bottom out over time.”
Gross margins at all four chains have remained steady over the past four years, helped by cost cutting initiatives like store closures. Database relationship diagram Operating margins have shown recent improvement at some chains like Kohl’s and Target, steadily improved for JC Penney, but contracted for others like Macy’s.
Macy’s gross margins at the end of the third quarter of 2016 stood at 39.8 percent, up slightly from 39.2 percent in 2013. Data recovery services near me Gross margins for Target, which straddles the discount and department store categories, were 30.2 percent in third quarter 2016, roughly unchanged from 30 percent in 2013. Database worksheet JC Penney improved its gross margins over the four-year period, whereas Kohl’s has held steady.
Target stood at 6.5 percent in 2016 up slightly from results for the last two years but down from 10.6 percent in 2013. Database constraints Target in that time has left foreign markets and sold off lower-margin, non-core businesses like its pharmacy operations.
Macy’s had seen operating margins contract to 1.9 percent in 2016 from 5.7 percent in 2013. Database vault JC Penney stood at 0.8 percent in 2016, up substantially from improving every year from a rock bottom level of negative margins of 14.4 in 2013.
“Sales are not impressive, but investors are most concerned with profitability and long-term value,” Neil Saunders, chief executive officer at research firm Conlumino said.
Qmobile data recovery software “These companies have done a better job keeping the business running on the operational side and delivering on profitability.”
In recent weeks, most department stores have reported a drop in holiday season sales, which includes stores and online. Tally erp 9 data recovery software Some have even slashed their earnings outlooks. 7 databases in 7 weeks This contrasts with industry-wide results, a 4 percent increase in the 2016 holiday season, to $658.3 billion, according to the National Retail Federation.
The companies continue to make economy measures such as reducing inventory, pressuring suppliers for lower prices and cutting supply chain costs.
Christina Boni, vice president and senior credit analyst at ratings firm Moody’s, expects operating margins at many department store chains to remain steady unless sales fall dramatically.
“These companies still have the ability to stabilize their business by taking costs out of the system and generating significant free cash flow to invest in new areas, which will improve operating margins,” she said.
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. 3 database models However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
• Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Database programmer salary Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. Database developer salary If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
Risk Disclosure: Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Data recovery agent Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Data recovery usb flash drive Currency trading on margin involves high risk, and is not suitable for all investors. Data recovery windows Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. Database definition All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Data recovery definition Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.