Macy’s and Kohl’s, two prominent department store chains in the US, are experiencing a sales recovery as back-to-school shopping and demand for fashion and beauty products surge. This boost in sales has led to an increase in annual sales forecasts for both companies, indicating a positive outlook for their financial performance.

Macy’s stock recorded a significant increase of 17% after announcing its decision to resume paying dividends, which had been halted last year due to the uncertainties caused by the pandemic. Similarly, Kohl’s stock also saw an 8% increase, reflecting the market’s confidence in these department store chains.

The back-to-school shopping season, which typically takes place from mid-July to early September, holds great significance for department stores. Last year, with students mostly engaged in remote learning, the demand for apparel, footwear, and backpacks was low. However, as kids return to school this year, there is a notable surge in demand for these items. This shift in consumer behavior is incredibly important for department stores, which were heavily impacted by the pandemic.

Industry estimates predict that back-to-school spending on items will exceed $100 billion this year. The distribution of stimulus checks and advance child tax credits is expected to further bolster sales during this period. In the second quarter, Macy’s witnessed a remarkable sales increase of 59%, while Kohl’s experienced a growth of 31.4%. These positive growth rates can be attributed to the resumption of social events and the gradual reopening of offices in the United States, fueled by widespread vaccinations.

Macy’s CEO, Jeffrey Gennette, emphasized the continued strength in categories such as dressy apparel, fine jewelry, and fragrance as customers prepared for in-person social events and the back-to-school season. In fact, Macy’s gained nearly 5 million new customers in the second quarter alone. Recognizing the shift in consumer behavior towards in-store shopping, Macy’s has also announced plans to launch Toys “R” Us shop-in-shops in 400 of its outlets starting next year, aiming to attract more customers and diversify its offerings.

Addressing the concerns of shoppers about sparsely stocked store shelves during the upcoming holiday season, both Macy’s and Kohl’s have expedited their supply chain processes to ensure faster restocking. With these measures in place, they aim to meet the high demand expected during the holiday season.

Macy’s has revised its full-year net sales forecast to be between $23.55 billion and $23.95 billion, compared to its previous estimate of $21.73 billion to $22.23 billion. Similarly, Kohl’s now expects a low-twenties percentage increase in full-year net sales, as opposed to the earlier estimate of a mid-to-high teens percentage rise. These revisions indicate the companies’ confidence in their future sales and growth prospects.

In conclusion, Macy’s and Kohl’s are witnessing a recovery in sales driven by strong back-to-school shopping and increased demand for fashion and beauty products. The anticipation of a successful back-to-school season, along with measures to address supply chain challenges, has bolstered both companies’ optimism about their future sales and growth. With these positive trends, they are well-positioned to capitalize on the recovering retail market.

Useful links:

1. Macy’s Official Website
2. Kohl’s Official Website