Overall sales forecasts going into the season were cautious.
ICSC estimated a 1.9% rise in spending, while Deloitte predicted a "K-shaped" approach to the season, wherein one arm kept growth at 0% to 1%, while another, more optimistic version had a rise of up to 3.5%. One complicating factor is that many retailers worked hard to get customers to shop early, which may have sent some holiday sales into the third quarter instead of the fourth.
While the overarching picture of sales will come later this year, here's a running list of the results of some of the holiday's biggest players:
Kohl's comparable sales fell 11% in the fourth quarter, helping drive a 10% decline in its top line, the company said in a preview of the quarter. The negative comps marked the discount department store's third quarter of improvement, coming on the heels of a 13.3% comp decline in Q3 and much worse net sales declines in Q1 and Q2. Kohl's digital sales in the fourth quarter were up 20% and represented more than 40% of net sales.
As sales fell, the company beat its own estimates on earnings. "Our focus on gross margin showed further traction and we managed expenses tightly, which together strengthened our financial position," CEO Michelle Gass said in a statement.
Jewelry retailer Signet delivered solid holiday results, bolstered by e-commerce, for the nine weeks ending Jan. 2. Sales totaled $1.8 billion, flat year over year. Overall same-store sales improved 5.6%: Physical same-store sales declined 4.1%, but digital was up nearly 61%.
Going into the season the company launched buy online, pick up in store and ship-from-store services. It also enhanced its website navigation, curation and visualization, resulting in a more streamlined customer experience. Signet said its e-commerce fulfillment capacity was five times that of last year, contributing to a successful delivery rate of over 98% of holiday orders in North America.
"Our results were driven by new digital and fulfillment capabilities, increasingly personalized and insight-based marketing, banner portfolio differentiation, and a strong merchandising strategy that included competitive newness and a strengthened core assortment," CEO Virginia Drosos said in a statement.
The company, which runs Kay Jewelers, Zales and Jared, among other brands, has shuttered 355 of its planned 380 store closures this fiscal year, and had paid down the full balance of its ABL Revolving Facility by the end of the holiday season.
Nordstrom is another retailer that may have ceded some holiday sales to the third quarter, when its popular anniversary sale took place. But the department store may also have suffered a merchandising miss as it offered its usual formal attire at a time when its customers were unlikely to be gathering, according to GlobalData Managing Director Neil Saunders. The department store recently unveiled an activewear push, but that was needed in time for the holidays, Saunders said. Nordstrom said that net sales fell 22% for the nine-week holiday period, though digital sales rose 23% and represented the bulk of the business.
"To Nordstrom's credit, it did make an attempt to increase the selection of gifting options outside of apparel and there were some smart ideas in evidence online and in stores," Saunders said in emailed comments. "These resonated with shoppers and did well in revenue terms. However, given their success this adds to the disappointment that Nordstrom did not double down on other high growth categories like home, which could have helped it to achieve better results."
Higher holiday pay and shipping expenses hit margins, and the company expects fourth quarter EBIT margin to be down about 500 basis points year over year, per its release. BMO Capital Markets Managing Director Simeon Siegel in emailed comments said he expects "a slight miss" compared to their expectations for the quarter overall, and Nordstrom "to remain a recovery trade favorite."
Target posted a blockbuster holiday performance for 2020, with its digital comparable sales up 102% and store comps up 4.2% for November and December. With a season largely defined by an ever-growing surge in COVID-19 cases, customers flocked to the mass merchant's same-day channels, which together grew 193% year over year.
Within that category, sales through Target's curbside Drive Up service ballooned by 500%, with 150 million items sold through that channel and Order Pickup in December. Sales through its Shipt delivery option were up 300%. Moody's Vice President Charlie O'Shea said in emailed comments that Target's holiday results "continue to position it as one of the true pacesetters in US retail, and reinforce the importance of physical stores in a multi-channel model, especially in light of the challenged delivery environment."
GameStop's e-commerce sales rose a whopping 309% for the nine weeks ending Jan. 2. That pulled up the gaming retailer's overall comp sales to 4.8%, and both were helped along by "unprecedented demand" for the latest generation of game consoles (which put pressure on supplies).
But the digital lift wasn't enough to head off a 3.1% decline to GameStop's top line. GameStop attributed this both to an 11% reduction in its store base over 2020 as well as store traffic declines, a result of the worldwide surge in COVID-19 during the season. "While GameStop's holiday sales performance was soft, we understand results were largely impacted by external and transitory factors," Tesley Advisory Group analysts led by Joseph Feldman said in a research note. "We continue to believe the company should be a winner in 2021, as those headwinds wane, supply of new consoles improves, and new titles are released."
L Brands reported that holiday net sales fell to $3.84 billion from $3.9 billion for the comparable nine weeks a year ago, though comps rose 5% in the period. As it has for a while, Bath & Body Works outperformed Victoria's Secret, with comps up 17% at the personal care brand (up 5% in stores and 64% growth online) and down 9% (down 23% in stores but up 24% online) at the lingerie brand. Merchandise margins "increased significantly," according to a company press release. The weaker performance at Victoria's Secret nevertheless represents something of a comeback, particularly when it comes to margins, according to BMO Capital Markets analysts. That could interfere with the company's determination to let Victoria's Secret go, according to BMO Managing Director Simeon Siegel.
"Management remains clear about their plan to split the brands and it goes without saying that VS is looking increasingly more attractive," he said in emailed comments. "That may actually make it more difficult to sell and a spin may prove the way to go. Either way, it remains a catalyst."
Tiffany, just before it was officially taken over by French luxury house LVMH, said by email that it saw record net sales worldwide for the holiday period. From Nov. 1 through Dec. 31, global revenue rose 2% and comps rose 4% year over year. In the Americas, net sales dropped 5% and comps fell 4%, a "very good outcome" considering the absence of tourists in major cities due to the pandemic, according to GlobalData Managing Director Neil Saunders. The company during the season attracted not just upper income shoppers less affected by the pandemic's economic fallout but also middle-income ones willing to splurge on items perceived to have long-lasting value, according to GlobalData research.
"Tiffany's strong holiday results show that, despite the ongoing turmoil of the pandemic, the season of goodwill was not cancelled," Saunders said in emailed comments. "Indeed, across most of the markets Tiffany serves, there has been a clear recovery in spending since the early part of 2020."
The storied American jeweler will navigate the rest of the year, and beyond, with a new team in place, as LVMH wasted little time in shaking up its executive and creative teams.
In conjunction with its holiday sales, Urban Outfitters said Sheila Harrington, who runs its best-performing Free People brand, will replace Trish Donnelly as CEO of the company. Donnelly is leaving Jan. 31 for another opportunity, the company said. Harrington will continue to lead Free People after she takes over.
It's a loss for an apparel retailer that will likely see rough going in the first half of the year, especially with Donnelly gone, according to emailed comments from MKM Partners.
The company also released a disappointing holiday sales report, missing MKM expectations for comps at all its banners. For the last months of the year, total net sales fell 8.4% compared to the period in 2019, only partly offset "by strong double-digit" e-commerce growth. Retail comps fell 9% on weak traffic due to the pandemic, according to a company press release. By brand, comps rose 1% at Free People and fell 8% at Urban Outfitters and 12% at Anthropologie. Wholesale segment net sales fell 1%.
The company expects its fourth quarter gross profit margins "to deleverage by several hundred basis points" due in part to higher delivery and logistics expenses of e-commerce, higher freight costs and more expedited shipments. But the holiday miss could also be a reflection of increased sales before Thanksgiving that showed up in the third quarter, which could spell trouble for other retailers as well, MKM Managing Director Roxanne Meyer noted. Still, the retailer's "issues are shorter-term and directly tied to the pandemic," she also said.
A month after voluntarily delisting from the Nasdaq and joining the OTCQX over-the-counter market, big and tall men's apparel retailer Destination XL said that total sales for the nine-week holiday season fell 23.9% to $78.4 million, with store comps down 38.1%. The retailer gets props from its customers for its attention to fit, and offers plus men's apparel from designer names that don't sell bigger sizes elsewhere. But it has suffered from falling sales of officewear, which slid further as the pandemic sent most employees home to work. There were some seasonal bright spots. E-commerce grew 28.4%, and included in the total is $4 million from its wholesale business, up from $3.4 million last year, according to a company press release.