A healthy economy and strong consumer spending gave a boost to Macy's Inc. and J.C. Penney Co., which reported sales growth for the critical holiday months.
Macy's said same-store sales rose 1% in November and December from a year ago, while Penney's increased 3.4%. The results were an improvement from a year ago when both chains reported declines. The big mall anchors are the first major retailers to give investors a readout on the holiday season.
Analysts and economists have predicted that low unemployment and rising wages gave consumers at all income levels the confidence to spend this holiday season. Retailers had their best holiday sales since 2011, according to Mastercard SpendingPulse, which tracks all forms of payments both in stores and online.
Both Macy's and Penney have struggled with falling sales as shoppers make fewer trips to malls and do more of their spending on smartphones. They have responded by closing weaker locations and ramping up investments in e-commerce.
"Consumers were ready to spend this season, and we delivered with solid execution," said Macy's CEO Jeff Gennette.
On Thursday, Macy's said it would close 11 stores early this year, which are part of about 100 closures the company had announced in August 2016. It will also be making staff changes that will involve downsizing or increasing staff in different stores.
After weak sales last holiday season, Macy's announced plans to cut 10,000 jobs and Penney unveiled plans to close 138 stores and offer buyouts to 6,000 workers.
On Thursday, Macy's increased its adjusted earnings guidance for fiscal year 2017 to be between $3.59 and $3.69 a share given the effect tax reform will have on the company's yearly tax rate. The retailer said it expects total sales during the 2017 fiscal year to fall between 3.6% and 3.9%.
Penney said it was reaffirming its previous financial targets, which include a forecast of fiscal 2017 comparable sales that will be flat to down 1% from a year ago.
After rallying in recent weeks, the shares of Macy's and Penney slipped in Thursday morning trading. Macy's shares fell 2.61% to $24.64, while Penney's shares dropped 3.5% to $3.57.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Allison Prang at firstname.lastname@example.org
(END) Dow Jones Newswires
January 04, 2018 10:28 ET (15:28 GMT)