Galeries Lafayette, the French department store chain, is reconsidering how it operates in China as the consumer downturn in the key luxury market drags on https://t.co/Jwko58jMYg ...

Duty-free sales at Japan’s top department stores rose in March, signaling a tentative rebound after months of weakness https://t.co/f2BaTfkHDt ...

Core Viewpoint - The article discusses the current state of retail investor behavior and highlights seven undervalued retail stocks that present investment opportunities. Retail Investor Behavior - Retail investors have shifted their behavior in Q1 2026, moving from buying dips to selling during stock surges, indicating decreased activity [1] - Retail investors accounted for approximately 18% of stock trading activity, a decline from the previous quarter and one of the lowest levels since 2024 [2] - The past week marked the slowest retail buying activity in four months, with trading volumes down over 50% compared to pre-Iran war levels [2] Influence of Key Figures - Elon Musk is noted for his significant influence on retail investors, possessing the ability to generate enthusiasm among individual investors [3] Methodology for Stock Selection - The article utilized stock screeners to identify retail stocks with a forward P/E under 15, focusing on those with the highest number of hedge fund holders as of Q4 2025 [5] - Hedge fund sentiment data was sourced from Insider Monkey's database, with the strategy showing a historical outperformance of the market [6] Undervalued Retail Stocks - **Kohl's Corporation (NYSE:KSS)** is highlighted as one of the most undervalued retail stocks, with a recent price target cut from $21 to $18 by Evercore ISI, which maintains an In Line rating [7] - Evercore ISI noted improvements in Kohl's same-store sales from fiscal Q4, but anticipates challenges due to macroeconomic factors [7] - Citi also lowered its price target for Kohl's from $20 to $14, reiterating a Neutral rating, citing missed sales and gross margin estimates in fiscal Q4 [8] - Kohl's operates family-oriented department stores offering a variety of products including footwear, apparel, beauty products, and home goods [9]

Group 1 - Macy's reported fourth-quarter 2025 net sales of $7.64 billion, a decrease of 1.7% year over year, with adjusted EPS of $1.67, exceeding expectations of $1.57, and comparable sales growth of 1.8% against a forecasted decline of 0.9% [1][2] - For fiscal 2026, Macy's management guided for net sales between $21.4 billion and $21.65 billion and adjusted EPS ranging from $1.90 to $2.10, reflecting a cautious outlook due to macroeconomic and geopolitical uncertainties [2] - TD Cowen analyst Oliver Chen maintained a Hold rating on Macy's and reduced the price target to $20 from $21, citing margin concerns amid inflation, tariffs, and freight-related costs impacting the retail sector [1][2] Group 2 - CFO Tom Edwards indicated that tariffs are expected to reduce EPS by approximately $0.05 to $0.10 and gross margin by about 40 to 60 basis points, particularly in the first half of fiscal 2026 [2] - The strength in fragrance and luxury categories contributed positively to Macy's performance, despite the overall challenges faced by department stores [1]

Core Viewpoint - Kohl's Corporation is facing significant challenges due to inflation, leading to a downgrade in its stock rating and price target by BofA Securities, indicating a tougher fiscal outlook for 2026 [1]. Financial Performance - For the fourth quarter, Kohl's reported net sales of $4.97 billion, a decrease of 3.9% year over year, with comparable sales down 2.8% [2]. - For the full fiscal year, net sales fell by 4.0%, and comparable sales declined by 3.1% [3]. - The fourth-quarter diluted EPS was reported at $1.07, while the guidance for fiscal 2026 suggests net sales could range from flat to down 2%, with adjusted diluted EPS projected between $1.00 and $1.60 [3]. Analyst Insights - BofA Securities analyst Lorraine Hutchinson maintained an Underperform rating on Kohl's and reduced the price target from $18 to $15, citing a deceleration in fourth-quarter comparable sales as a sign of a challenging fiscal 2026 [1]. - The analyst noted that a real turnaround in Kohl's business may require additional investment [1].

Core Viewpoint - Macy's Inc. has experienced significant fluctuations in its stock price, initially benefiting from a turnaround strategy but facing challenges due to consumer spending concerns and conservative guidance from the company [2][3][6] Stock Performance - In 2025, Macy's stock was a strong performer, with shares surging 140% from a low of below $10 in April to a high above $24 in December [3][4][6] - By the end of 2025, the stock price fell to around $22, and in early 2026, it traded between $20 and $22 before dropping below $17 by March 18, 2026 [5][6] Turnaround Strategy - The "Bold New Chapter" strategy, initiated in 2024, aims to reposition Macy's by closing underperforming locations, expanding in the luxury segment, and improving operational efficiency [4][6] - The company has reported better-than-expected earnings for four consecutive quarters, indicating that the turnaround strategy is gaining traction [6] Analyst Sentiment - Despite strong quarterly results, analysts have adopted a cautious stance due to Macy's conservative full-year guidance and uncertainties surrounding discretionary consumer spending, leading to lowered price targets and a consensus rating of "Reduce" [3][6]

Core Insights - The company anticipates net sales for FY26 to be between $21.4 billion and $21.65 billion, a slight decrease from $21.8 billion in FY25, indicating limited growth expectations [1] - Comparable sales are expected to fluctuate between a decline of 0.5% and growth of 0.5%, influenced by macroeconomic and geopolitical factors affecting discretionary spending [1] Fiscal 2025 Performance - In FY25, net sales decreased by 2.4% year-over-year, primarily due to the reduction of non-go-forward locations, although comparable sales increased by 1.5% [2] - Within go-forward operations, comparable sales rose by 1.7%, with net sales for Macy's decreasing by 3.8% but comparable sales increasing by 0.4% [3] - The Reimagine 125 locations saw a 1% increase in comparable sales, while Bloomingdale's achieved a 6.3% rise in net sales and a 7.4% increase in comparable sales [3] Strategic Initiatives - The company plans to expand its Reimagine strategic initiative to include 75 additional stores, creating "Reimagine 200" for 2026 [4] - Gross margin for FY25 was reported at 38.0%, a decline of 40 basis points due to tariff effects and markdowns [4] Financial Metrics - The company's net income for FY25 was $642 million, representing 2.8% of total revenue, translating to diluted earnings per share (EPS) of $2.32 [5] - In Q4 FY25, net sales were $7.6 billion, a decrease of 1.7%, with positive comparable sales across all nameplates at 1.8% [6] - The quarterly gross margin was 35.2%, declining by 50 basis points, primarily due to tariffs [6] - Net income for Q4 FY25 totaled $507 million, with adjusted diluted EPS of $1.67 [6] Leadership Insights - The chairman and CEO emphasized the company's focus on offering relevant brands, enhancing storytelling, and investing in employees to improve customer service [7]

Core Insights - Kohl's is at a pivotal moment as it enters 2026, with over 1,000 stores still operational and a focus on its physical footprint amid changing consumer habits and store closures [1][2] Store Operations - Kohl's CEO Michael Bender announced that there are no plans for additional store closures, with over 90% of the remaining 1,150 locations now operating profitably, indicating a shift from contraction to operational efficiency [3][4] - The company will focus on optimizing its existing store footprint rather than downsizing, with plans to improve store productivity and refine operations without opening new stores [4] Recent Closures and Real Estate Value - In 2025, Kohl's closed 27 stores across 15 states and one e-commerce distribution center as part of cost-cutting measures [5] - Despite the closures, real estate investor Jason Miller noted that the closed stores were leased, meaning Kohl's did not gain economic benefits from their sale or redevelopment, but strong demand for replacement tenants suggests the locations have retained value [6] Competitive Landscape - Kohl's faces increasing competition from e-commerce giants like Amazon and value-focused retailers such as Ross Stores and TJMaxx, which are attracting budget-conscious consumers [8]

Core Insights - Department stores, including Macy's, are facing challenges due to the rise of discount retailers and e-commerce [1] - Macy's reported a 1.7% decline in net sales to $7.6 billion for Q4 FY2025, marking 15 consecutive quarters of sales declines, despite a 1.8% year-over-year increase in comparable sales [2] Group 1: Performance Highlights - Bloomingdale's, a high-end segment of Macy's, reported net sales growth of 8.5% and comparable sales growth of 9.9% in Q4 FY2025, significantly outperforming other brands in Macy's portfolio [4] - For the fiscal year 2025, Bloomingdale's achieved 7.4% comparable sales growth, a 490 basis point improvement year-over-year and a 1,030 basis point improvement over two years [5] Group 2: Strategic Initiatives - Macy's "Bold New Chapter" strategy has focused on enhancing customer experience and brand partnerships at Bloomingdale's, contributing to its success [6] - The company is committed to funding Bloomingdale's growth through capital and SG&A investments, viewing it as crucial for Macy's overall business strategy [7] Group 3: Competitive Landscape - Bloomingdale's is benefiting from the bankruptcy of Saks Fifth Avenue, as former Saks customers and vendors are seeking alternatives, positioning Bloomingdale's as a favorable option [8]

Core Insights - Macy's has revised its store closure plan, extending the timeline for the closure of 150 stores due to improved financial performance [2][4] - The company reported positive comparable sales and better-than-expected results in every quarter, marking a significant turnaround [2] - The remaining 65 store closures will now occur through 2028, allowing for flexibility in timing to maximize asset value [4] Financial Performance - CEO Tony Spring highlighted that Macy's achieved "positive comparable sales" for both Macy's Inc. and Macy's Nameplate [2] - The company delivered adjusted diluted EPS significantly above its own guidance, indicating strong financial health [2] Store Closure Strategy - Initially, Macy's planned to close 150 stores by 2024, but the timeline has been extended to 2028 [4] - CFO Tom Edwards emphasized the importance of a strong balance sheet and cash flow generation in allowing for flexibility in the closure schedule [4]