Retailers deliver investors some holiday spirit
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Illustration: Sarah Grillo/Axios
A handful of retailers — from a struggling department store chain to sellers of consumer electronics, apparel and sporting goods — raised their sales forecasts for the year on Tuesday, saying they're well-positioned heading into the holiday season.
Why it matters: Declining consumer sentiment and new data showing a slowdown in U.S. retail sales growth in September paint a picture of an increasingly shaky consumer — but investors are still managing to enjoy some holiday cheer.
Driving the news: Kohl's, despite another drop in quarterly comparable sales, raised its full-year outlook, citing an uptick in customer visits and a strong October.
- Best Buy lifted its annual revenue forecast after better-than-expected sales last quarter, as shoppers sprang for computers, gaming gear and mobile phones.
- Dick's Sporting Goods raised its full-year outlook for its main brand, pointing to growth in both store traffic and average transaction size.
- And Abercrombie & Fitch said sales grew 7% last quarter, with surging sales at its Hollister brand allowing it to raise the low end of its full-year sales outlook.
All four companies expressed confidence heading into the holidays — even as their customers remain price-sensitive.
Zoom in: "The holidays are always a promotional time period, and we expect this to continue this year, especially given the state of the consumer," Kohl's CEO Michael Bender told analysts on Tuesday's earnings call.
- Lower- and middle-income consumers, along with younger shoppers, are seeking more value, he said. Still, Bender noted momentum heading into the season, with beauty products and toys resonating with shoppers.
Best Buy said it hired thousands of seasonal flex workers a week earlier than usual and provided additional training to support more immersive in-store experiences and demos.
- Abercrombie said it feels prepared for the season and is keeping inventory tight to limit the need for promotions and clearance.
- "We are really bullish on the holiday," Dick's CEO Lauren Hobart said on the company's call.
The impact: Kohl's shares surged more than 40% Tuesday, while Abercrombie jumped 37%. Both remain far below their historic peaks as the companies work through long-running operational and strategic challenges.
- Best Buy and Dick's logged more modest gains.
The bottom line: At least for now, the holidays are looking green for investors.
Editor's note: This story was corrected to state that September retail sales growth slowed to 0.2% in September, per Commerce Department data. An earlier version incorrectly stated retail sales had dropped.
