This holiday season could be a “sobering” one for America’s department store chains, warns Credit Suisse analyst Michael Binetti. He told clients in a note Thursday to expect a “wave of lowered guidance” as Macy’s, JCPenney, Nordstrom and Kohl’s start to report fiscal second-quarter earnings next week.
While these retailers appear to have tightened their inventories during the second quarter, which should help reduce pressure on gross margins, Binetti predicts these companies will have lower sales and earnings targets for the second half of the year, with waning foot traffic at stores hurting the group.
To top it off, these retailers now face the 10% tariffs set to go into effect on September 1, which will hit apparel and footwear, among other consumer goods. “Department store cost structures will be even more pressure[d] than expected in the near term,” he said.
Credit Suisse is lowering its profit estimates for some of the department store stocks. It now expects Macy’s will report second-quarter earnings per share of… CNBC News