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Q3 A Mixed Bag For Department Store Stocks So Far

Department Stores' Q3s A Mixed Bag So Far: BAM, JCP, JWM, KSS, XRT, M, SHLD

SPDR S&P Retail (ETF) XRT 2.42% is rallying strongly Thursday despite the lackluster showing by the broader market. The catalyst could be the retail earnings that are trickling in.

Macy's Muted Showing

Department store chain Macy's Inc M 7.19% reported Thursday ahead of the open its third-quarter adjusted earnings per share of $0.17, down from $0.56 in the year-ago period. This was also notably lower than the consensus estimate of $0.41 per share.

Sales of $5.626 billion was down 4.2 percent and missed the average analysts' estimate by a whisker. Comparable store sales were down 2.7 percent.

The company reaffirmed its earnings per share guidance of $3.15–$3.40 for 2016 and raised its sales guidance. Comps are now expected to drop 2.5–3 percent versus previous expectations of a 3–4 percent decline.

As part of its strategy to generate value from its real estate, the company announced an agreement with Brookfield Asset Management Inc BAM 2.04% to explore value creation opportunities in its real estate portfolio.

The update on real estate monetization and positive sales expectations for the year have buoyed the stock.

Q3 EPS-Beat From Kohl's

Meanwhile, Kohl's Corporation KSS 11.95% also reported ahead of the market open Thursday, above-consensus third-quarter earnings of $0.80 per share. This was up from $0.75 per share in the year-ago period.

Sales, despite falling 2.3 percent to $4.33 billion, were about in line with estimates. Comps fell 1.7 percent reversing the 1 percent increase in the year-ago period.

Going forward, the company reaffirmed its earnings per share guidance for the year, with the adjusted earnings expected at $3.80 to $4 per share. This is in line with the consensus estimate.

More Retailers On Deck

Luxury retailer Nordstrom, Inc. JWN 8.82% is due to release its quarterly progress card after the market close Thursday. Analysts, on average, expect earnings of $0.51 per share, down from $0.57 per share, on an estimated 4.7 percent sales growth to $3.48 billion.

J C Penney Company Inc JCP 8.73%, which is scheduled to report its financial results before the market open on Friday, is expected to report a loss of $0.21 per share, narrower than the year-ago loss of $0.47.

Sales may have edged up to $2.96 billion from the year-ago's $2.90 billion.

Retail chain Sears Holdings Corp SHLD 6.18% is expected to report a loss of $4.06 per share on revenues of $4.95 billion. In comparison, the company lost $2.98 per share last year, with revenues at $5.75 billion.

At Last Check ...

  • JC Penney was up 8.73 percent to $9.09.
  • Kohl's was rallying 14.11 percent to $52.15.
  • Macy's was up 8.57 percent at $41.67.
  • Nordstrom was gaining 8.49 percent to $56.73.
  • Sears Holdings was advancing 8.08 percent to $12.77.
  • SPDR S&P Retail was up 2.82 percent at 43.79.

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