Holiday shopping reports released on Thursday underscored anew the challenges US retailers face in the Amazon.com Inc era — even if consumers are willing to open their wallets to spend.
The updates were a mixed bag overall, with several retailers reporting small or moderate increases in comparable store sales during the critical November to last month period, but a report from Macy’s Co aroused the most angst on Wall Street, after the retail chain slashed its profit forecast even as it signaled a modest increase in sales.
Macy’s shares plunged almost 20 percent, while nearly every major retailer was pulled down as well.
That included companies such as Target Corp that reported higher holiday sales and confirmed — but did not raise — profit forecasts.
The results were an ugly finale to a US holiday shopping season that opened with high expectations owing to robust consumer confidence amid a strong employment market, relatively low gasoline prices and a boost from tax cuts.
Mastercard SpendingPulse last month estimated holiday sales growth of about 5.1 percent to more than US$850 billion, the strongest jump in the past six years.
By that estimate, the holiday shopping season was a strong one — just not for retailers.
“It was a good season. Consumers had more money to spend. They spent it, but the cost of doing business is getting higher,” retail industry consultant Dana Telsey said.
The latest results suggested retailers still have not found a winning recipe for the transition to the e-commerce era, while experts say the industry is still undergoing an existential shakeout.
Companies such as Macy’s, JC Penney Co and Gap Inc have shuttered stores in recent years, while Toys “R” Us Inc went out of business completely — a fate that could also soon befall iconic US retailer Sears Holdings Corp.
Macy’s shares tumbled 18.7 percent after it reported an increase of 1.1 percent in comparable sales, but lowered its annual earnings forecast to a range of US$3.95 to US$4.00 a share from US$4.10 to US$4.30.
Sales were dented by a fire in a distribution center in West Virginia and a pre-Christmas “earn and redeem” promotional event that was unsuccessful, Macy’s said.
“The holiday season began strong, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” Macy’s chief executive Jeff Gennette said.
Target said comparable sales grew 5.7 percent over the holiday, while Kohl’s Corp put sales growth at 1.2 percent.
L Brands Inc, the parent of Victoria’s Secret, reported flat comparable sales for the five weeks ending last Saturday.
Target shares fell 4.0 percent, Kohl’s shares dropped 7.1 percent and L Brands shares declined 7.6 percent.
Analysts said the declines were exacerbated by expectations that earnings growth would be tough this year after a strong last year following the US tax cut enacted in late 2017.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS