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The turnaround at Macy’s, Kohl’s and Nordstrom is uncertain as department stores head into the holiday season

America’s malls have opened their doors for another Black Friday – but it’s no longer the 2000s with lines snaking around store entrances, and that has cast dark clouds over the future of some department stores.

“The entire holiday shopping experience is completely different now,” said Morningstar analyst David Swartz, due to retail giants like Amazon (AMZN), Walmart (WMT) and Target (TGT).

Additionally, discount retailers like Ross Stores (ROST) and TJX Companies (TJX), which owns TJ Maxx and Marshall’s, are “continually taking sales away from department stores,” Swartz added.

Macy’s (M), Kohl’s (KSS) and Nordstrom (JWN) are fighting to stay in the game by closing struggling stores and pouring money into online operations.

However, legacy department stores are still lagging behind in the digital space and the question remains as to whether they will continue to be listed companies in the future given changing purchasing habits and high operating costs.

In Macy’s preliminary third-quarter results, same-store sales fell 1.3%. Net sales fell 2.4% to $4.74 billion. Data from Yahoo Finance shows that analysts expect Macy’s to report sales of $22.1 billion in 2024 – if achieved, that would be about $3 billion less than calendar year 2021.

Kohl’s net sales fell 8.8% to $3.5 billion in the third quarter. Same-store sales fell 9.3%, driven by weakness in apparel and footwear. The company fired its CEO, Thomas Kingsbury.

Kohl’s is expected to generate $15.8 billion in sales this year, down about $4 billion from calendar year 2021.

Nordstrom’s same-store sales rose 4% in the third quarter for its namesake brand. Sales at off-price store Nordstrom Rack rose 3.9%.

According to an analysis by Yahoo Finance, shares of all three retailers trade at a paltry price-to-earnings ratio of 8, a significant discount to the 22.5 times offered by the S&P 500 (^GSPC).

Analysts estimate Nordstrom’s full-year revenue at $14.8 billion, roughly in line with calendar year 2021.

Investors in all three chains should expect flat to low single-digit sales declines for the holiday season, CFRA analyst Zach Warring told Yahoo Finance.

In comparison, the National Retail Federation (NRF) expects consumers to spend between 2.5 and 3.5% more during the holidays than last year.

“Consumers are looking for value more than ever,” JCPenney CEO Marc Rosen said in a call with Yahoo Finance. “What has evolved … is the way consumers view value.”

Macy’s shares have fallen 19% this year to about $16 a share, compared with a tender offer of $24.80 a share that was rejected in July.

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