Kohlâ€™s (NYSE:KSS) and Macyâ€™s (NYSE:M) reported on Thursday another quarter of weaker sales, but the results werenâ€™t as bad as expected thanks to improved store traffic.
Retailers including Kohlâ€™s, Macyâ€™s and J.C. Penney (NYSE:JCP) have closed stores and cut costs during a period of declining sales. Stores have struggled to compete with e-commerce rivals such as Amazon.com (NASDAQ:AMZN) with more consumers shopping online.
In its fiscal second quarter ending July 29, Kohlâ€™s logged a sixth straight period of negative comparable sales, which fell 0.4%. However, analysts were looking for a steeper loss of 1.5%. Macyâ€™s had a similar story. Sales at Macyâ€™s stores open at least a year slipped 2.5%, better than the average estimate of a 3% drop.
Kohlâ€™s has seen a shift in traffic trends since the start of 2017, executives said during the retailerâ€™s earnings call. Traffic momentum in March and April accelerated into July, when Kohlâ€™s posted an increase in monthly transactions year-over-year. The Wisconsin-based retailer added that sales have climbed from one quarter to the next, also indicating positive momentum.
â€œDriving traffic is the single biggest priority for the company,â€ CEO Kevin Mansell told analysts on the conference call.
Mansell said activewear brands like Nike (NYSE:NKE), Under Armour (NYSE:UA) and Adidas were positive sellers during the quarter. He noted that Nike, the most popular brand in Kohlâ€™s stores, has increased sales even after the company added Under Armour to its sports apparel.
Kohlâ€™s reported a 48% jump in quarterly profit. In the same period last year, Kohlâ€™s recorded a one-time charge of $128 million related to store closures and other items.
Kohlâ€™s, which closed 19 stores in 2016, doesnâ€™t expect another wave of closures beyond the normal turnover for individual stores.
â€œYou should not expect anything about store closures this year,â€ CEO Kevin Mansell told analysts on a conference call.
Kohlâ€™s second-quarter net sales dropped 1% to $4.14 billion, matching estimates. Macyâ€™s booked net sales of $5.55 billion, down 5.4% but better than the consensus estimate of $5.52 billion.
Macyâ€™s executives said they are focused on increasing traffic in stores and online, particularly for the busy holiday shopping period.
Shares of Kohlâ€™s dropped 7.1% in recent trading. Macyâ€™s retreated 9%.