Wanna know why pot shops, gun stores, and craft emporiums fought so hard to be named an essential business during the pandemic?
The truth is out there… in the terrifying fine print of corporate earnings reports.
Three titans of US retail weighed in on Tuesday. Their updates show how the sector is shaking out into a few winners and LOTS of losers.
The good: Walmart
America’s largest retailer benefited in a big way from staying open as an essential business. US same-store sales grew by 10% in Q1, and ecommerce sales skyrocketed by 74%.
Business Insider said Walmart’s experience showed how shopping habits changed as the pandemic set in and consumers started hunkering down at home. They made fewer trips, but spent more — the average receipt rose by 16.5%.
One interesting footnote: Walmart is discontinuing Jet.com, the online-only retailer it bought in 2016 for $3B. You win this round, Bezos.
The not-as-good: Home Depot
The picture for the home-improvement giant was mixed: Same-store sales grew by 6.4%, and Q1 revenue rose 7.1% over last year.
But the company said coronavirus-related costs were a huge drag on its finances. It spent ~$850m on employee benefits to keep stores and warehouses humming.
The ugly: Kohl’s
When stores close, as Kohl’s locations did, profits plummet. The company said sales were down by a whopping 43.5% in Q1 compared to last year.
Its next challenge will be avoiding the same fate of other big-name retailers like J.Crew, JC Penney, and Neiman Marcus — all of which have sought bankruptcy protection. Pier 1, which filed for bankruptcy in February, is planning to close all of its stores.
Kohl’s has reopened about half of its stores, and the company’s CEO says they’re made for social distancing — because they’re big and they’re not in malls.
