By Thomas Paulson, Head of Market Insights Kohl’s: Quarterly sales were “less bad” at a decline (-9.4%) than our preview (we said -14%). In our preview, we also forecasted that incoming CEO Ashley Buchanan would set a very low bar on forward expectations, he did. Revenue for 2025 was guided for a decline of -5 to -7%. The operating margin target for the year was also significantly down (2.2% to 2.

By Thomas Paulson, Head of Market Insights Last week’s analysis included management’s comments relative to any DEI backlash that they were seeing no impact to their business. However, over the weekend, media outlets wrote about a negative impact on Target store traffic and business from the backlash. Well, third-party data being third party (i.e. an estimate vs. ground truth first-party data) requires understanding the scope of the aggregation and its limitations.

By Thomas Paulson, Head of Market Insights To say that this is a dynamic time for grocery retail is a classic underbilling given the inflationary spiral coming out of the pandemic, the substantial share-of-stomach lost by conventional brands to private-label led retailers such as Trader Joe’s and Costco, an abandoned merger by Kroger and Albertson’s, and this week’s news of the departure of their CEOs. Before we jump into the earnings results from Kroger, we’d point readers to our recent analysis of the results from Grocery Outlet , Sprouts , and Walmart & Ahold .

By Thomas Paulson, Head of Market Insights Macy’s Inc. reported improved holiday results as Advan previewed . Macy’s go-forward 350 reported a comp-sales decrease of -1.6%, roughly in-line with Dillard’s (-1%), and Bloomingdale’s reported a comp-sales increase of +4.8%, roughly in-line with Nordstrom banner’s +5.3% increase. Versus 2019, Macy’s comp (-7%) was similar to FQ3’s and better than the 1H’s. Bloomingdale’s improved to +18% from mid-teens in the prior three quarters.

Dillard’s is the first of the traditional department stores to report in the earnings cycle, providing a glimpse into the past few months of consumer demand. Dillard’s comp-sales decline of -1% was the most muted of the year, but that leaves the business only 5% above 2019’s level (on a comp basis) which is below the 8% level in the 1H’24, i.e. things are not getting “less bad” on an underlying basis.

This past week brought a lot of news on the beauty market with earnings from Procter & Gamble, e.l.f. Beauty, Estée Lauder, and L’Oréal. The takeaway from those is that luxury part of the market remains robust, but L’Oréal is taking a lot of share from Estée, which is in trouble. The mass part of the market has experienced a further slowdown. That divergence demonstrates that the K-shaped consumer economy in the U.

Grocery Outlet Holding announced Q4 results along with a new CEO, Jason Potter – The Fresh Market’s recent CEO, and a restructuring program. (The CEO change was expected) This follows the appointment of its new CFO / CIO in January – Chris Miller from Shamrock Foods. The restructuring program notably: (1) lowers the unit expansion rate to 34 new locations (down from the prior plans 54), (2) seeks to terminate leases for some of the unopened stores, (3) includes warehouse project cancelations, and (4) involves layoffs.

Looking at the off-price sector overall, comp-traffic was solid and while the rate was slower QoQ, that deceleration largely reflected the abbreviated shopping period this year (five fewer days and one fewer weekend between Thanksgiving and Christmas). Sales were likely little impacted as more items per visit were purchased. As has been the case all year, TJX’s Marshalls and TJ Maxx led its peers Ross Dess for Less and Burlington in comp traffic growth and likely in comp-store sales per Advan’s estimates.

Lowe’s and Home Depot both noted a very strong December that benefited due to calendar shifts to the detriment of November and January. As shown in the chart above, the traffic in the two weeks following Christmas was very robust. Also of note, the deep drop in traffic ahead of Christmas reflects the absence of one weekend between Holiday-2024 and -2023. (The basket size is up a lot during this period.

Savers Q4 results showed US sales up +10.5% and comp-sales up +4.7%. The sales increase was ahead of Advan’s +8.2% estimate* (+/- 40 bps T4Q Moe, 95% T5Q correlation). The 230 bps of outperformance largely reflects a +580 bps contribution from the bolus of new stores opening in the 2H (vs. the 6-month trend of 390 bps). (The year-end U.S. store count was up +11.6% vs the 1H’s +8.6%.) Unfortunately for the company, its large Canadian business continues to be an anchor with comp-sales down -2.