Retailers are experiencing a mixed season, so are the department stores.
Not a lot of consumers are going in hoards to spend their money in department stores. It may be due to this year's later Labor Day, or maybe they'd rather be in the beach than shopping in the malls.
For the month of August, department stores have reported their earnings. TJX Companies, Ross Stores, and Burlington Stores are very popular these days. Analysts are pleased with TJX as it is seen as a leader after reporting its second-quarter earnings on August 18.
Burlington Stores also reported an upbeat second-quarter earning on August 27. JP Morgan's Matthew Boss said, "Burlington offers a compelling opportunity to participate in the outperformance of the off-price channel"
Credit ratings agency Moody saw that the biggest off-price retailers, TJX, Ross Stores, and Burlington, are projected to have a 6 to 8 percent growth in the next five years. This is an exceptional prediction, because Moody only projected a 4 percent growth from the entire retail industry.
Kohl's, on the other hand, is not experiencing the same increase in earnings as the other department store companies. On August 13, it reported a weak second-quarter. Cowen & Company's Oliver Chen and team cut the price target to just $62 from $72.
Kohl's chairman Kevin Mansell said their sales results were lower than what they planned as the shift of sales in tax-free states from July to August was larger than what was anticipated. He said they managed their expenses for this season well, and that their inventory receipts are poised for the back-to-school and fall seasons.
Upscale department store Nordstrom reported an upbeat second quarter on August 14. Credit Suisse's Michael Exstein and team rated the company with a $76 price target on August 20. UBS's Binetti and Stambaugh noted Nordstrom at Buy with an $86 price target on August 14.
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