Ongoing department store woes reflected in latest batch of results

NEW YORK — The outlook for department stores grew murkier Tuesday after J.C. Penney, Kohl’s and Nordstrom reported fiscal first quarter results that reflected their struggles at the start of the year.

Penney, which has been trying to turn around its business for several years after a disastrous reinvention plan, reported a wider than expected loss and sales declines during the quarter.

Kohl’s sales momentum also stalled and it cut its fiscal 2020 profit outlook. It cited damp weather that cut into sales of spring clothing and a competitive environment in discounted home goods.

Upscale Nordstrom, which reported results after the close of trading on Wall Street, reported a first quarter sales drop and cut its annual sales forecast.

The downbeat reports from the department store chains were in contrast to Macy’s performance. Macy’s reported a first-quarter profit last week that smashed Wall Street estimates. It also put up its sixth consecutive quarter of increases in comparable store sales — or sales in stores open a year — fueled by its robust online business after a three-year sales slump. However, it’s still facing challenges attracting shoppers.

Department stores have been trying to reinvent themselves as more shoppers go online. They are also facing increasing competition from the likes of T.J. Maxx and other offprice stores, which offer coveted brands at cheaper prices. T.J. Maxx’s parent reported strong results Tuesday that topped Wall Street estimates, indicating that shoppers continue to be drawn to its treasure hunt experience.

To lure customers, department stores have been offering exclusive merchandise and adding online services. Last month, Kohl’s said it was expanding is partnership with Amazon, with plans to accept Amazon returns in all of its 1,150 stores starting in July. But apparently, those efforts haven’t yet translated into higher sales.

“The middle market is collapsing,” said Steve Dennis, a strategic retail adviser. “They’re fighting so many headwinds.”

Department stores are also facing the threat of escalating trade wars with China that could mean higher prices on clothing and other goods.

Retailers had been left largely unscathed by the first several rounds of tariffs since they focused more on industrial and agricultural products.

But items like furniture saw an increase in tariffs to 25% two weeks ago. And now the Trump administration is preparing to extend the 25% tariffs to practically all Chinese imports not already hit with levies, including toys, shirts, household goods and sneakers.