In November, which turned out to be a tough month for some retailers, comparable store sales â€" those in stores open for at least a year â€" fell by just over six percent at Macy's, more of a plummet than analysts expected. J.C. Penney's comp slide of just under six percent also disappointed the analysts. Meanwhile, Target, after almost breaking even in October, missed its own and analyst estimates with a one-and-a-half percent comp decline.
For its part, Kohl's comparable store sales gained just over three percent on a seven percent total sales rise. In a season when consumers seem to be shopping more but spending less, Kevin Mansell, Kohl's CEO, reported that the company's transactions -- the number of visits to the cash registers rather than the money ringing through them -- gained 10 percent in the month. Given the competitively necessary discounts that fill stores these days, Kohl's clearly has a strong following behind it. But more about that in the moment, as the company's business trend speaks something, too.
Kohl's, in the third quarter ended Oct. 31, posted a 20 percent increase in net income to $193 million, or 63 cents per diluted share, on an almost seven percent overall sales gain and a comp advance of just over two percent. For the nine months ended Oct. 31, net income was basically flat, although up a tad, while net sales gained three percent percent to almost $12 billion and comps decreased just over one percent. So, it's fair to say that the Kohl's turn around in the year has been consistent and achieved without recourse to promotions that push comps while driving results into the red.
So, why is Kohl's getting stronger? Consultants The Gordman Group went out to evaluate the extent to which major retailers have been really going after their core shoppers. Kohl's along with Nordstrom (JWN), Ross (ROST), TJX (TJX), Gap (GPS), and The Limited (LTD), is improving in its appeal to the core customer, Gordman said, and among a group of retailers who are posting better comps. Macy's is among a group that isn't focusing as intently on core shoppers, according to Gordman. That bunch includes Target, Steinmart (SMRT), Abercrombie (ANF), Buckle (BKE), Talbots (TLB) and Cost Plus (CPWM). Membership there is not seeing comparable store sales trend improvement and, in some cases, actually is experiencing declines, the consultancy asserted.
So, now, the logical question is, how is Kohl's appealing to its core customer? A look at its recent marketing provides some insight.
Immediately after Thanksgiving, Kohl's offered a series of promotions that aimed at the masses but particularly rewarded its regular shoppers. Among them was a Pick-Your-Day deal through Sunday, Nov. 29, that permitted Kohl's charge cardholders special additional savings in store or online. Basically, the retailer launched a One-Day Sale that provided customers the leisure of picking the day and carholders the benefit of a better deal. Additionally, the retailer offered $10 in Kohl's Cash coupons for every $50 spent in store or online. And it waved brand exclusions on bargains when consumers used Kohl's Cash coupons or the company's charge cards.
Kohl's basically made shoppers a deal: you scratch my back and I'll scratch yours, and any primate will tell you, that's the first step in a close personal relationship. The scratch-for-scratch arrangement, in fact, began achieving results millions of years before anyone thought about starting online social networks. The retailer has more deals coming and count on them to reward regular shoppers, who may be making merry for themselves and the company this holiday season.