Episode summary
Kohl’s Jumps on Outlook Boost in Sign of Consumer Resilience | Bloomberg Intelligence
Bloomberg Intelligence
· · 22 min · Hosts: Paul Sweeney, Alexis Christoforous · Guests: Mary Ross Gilbert, Lindsay Dutch, Michael Halen, Diana Rosero Pena
Summary
Retail earnings pointed to a consumer that is still spending, but selectively. Kohl’s said July sales were flat and offered a less-bad full-year outlook, with comparable sales now expected to fall no more than 5% this year, helped by core private brands and value-priced merchandise. Mary Ross Gilbert said the stock’s move also reflected short covering, while noting Kohl’s is still working through three years of declines and working-capital pressure from holiday inventory.
Abercrombie & Fitch beat overall, but its namesake brand missed badly as old inventory at lower price points weighed on comps. The guest said Hollister drove the quarter and that management is leaning on denim and an NFL collaboration to reaccelerate the business. The broader read-through was that lower-income shoppers remain pressured, but they are still buying when the value is clear.
Williams-Sonoma posted another strong quarter, with sales momentum across all brands and guidance unchanged for operating margin despite tariff headwinds. The guest said the company is using selective price increases, supplier negotiations, and sourcing shifts to offset a higher-than-expected tariff burden. Cracker Barrel and J.M. Smucker also showed how companies are handling pricing, branding, and cost pressure: Cracker Barrel is refreshing stores and raising some prices, while Smucker is passing through coffee costs and cutting SKUs at Hostess as consumers push back.
Key takeaways
- Mary Ross Gilbert said Kohl’s July sales were flat and its guidance implies comparable sales down no more than 5% this year.
- Kohl’s is leaning on private-label and value merchandise, which the guest said is resonating with its low- to low-middle-income customer.
- Abercrombie’s namesake brand comps fell about 11%, worse than expected, while Hollister drove the quarter.
- Lindsay Dutch said Williams-Sonoma is offsetting tariff pressure with selective price increases, supplier negotiations, and more U.S.-made inventory.
- Diana Rosero Pena said J.M. Smucker expects a 50 cent EPS hit from tariffs this year, up from 25 cents previously.
- Michael Halen said Cracker Barrel is using store refreshes and strategic 5% price increases to support results while traffic improves.
Notable quotes
“July sales were flat. That was really encouraging”
“they're bringing back the core private brands that are really resonating because they're the mo the open price points”
“it's going to take over five days to cover, you know, shorts”
“we are seeing across the board that there is sharing. It's usually about 50%”
How the episode opens
Bloomberg Audio Studios podcasts radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.
Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Want to talk retail now because we've got more numbers out today from some big players including Kohl's and uh Abberrombia.
Let's break it all down now with Mary Ross Gilbert, Bloomberg Intelligence's senior equity analyst. Uh she covers retail. Uh so she's the right person to talk to right now.
So Mary, uh Kohl's trying to reverse 14 straight quarters of declining revenue. How' they do?
Yeah. So, Alexis, Kohl's, okay, look, they reported comp sales down still and as you pointed out, 14 consecutive quarters of declines or another way to look at it over the past three years. They're cycling three years of declines.
So, but what really we're looking at in the in the news that came out with Kohl's one is that on the call the company said July sales were flat. That was really encouraging. And when you look at the third quarter and the guidance for the third quarter, again, still looking for declines for the balance of the year, down four to five percent on a comp sales basis, but July for the third quarter, they're going to cycle a 9.3% uh decline last year.
So that means the comparisons are easier and they're off to a good start. So it's encouraging. And what we're finding is that they're bringing back the core private brands that are really resonating because they're the mo the open price points and their core consumer which is that sort of low to low middle income consumer.
They're really uh pressed by in inflation still.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- retail earnings
- consumer resilience
- consumer discretionary guidance
- restaurant and foodservice updates
- consumer staples demand
Companies and tickers mentioned
- KSS
- ANF
- WSM
- CBRL
- SJM
- Kohl’s
- Abercrombie & Fitch
- Williams-Sonoma
- Cracker Barrel Old Country Store
- JM Smucker
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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