What We Learned About Macy’s, Nordstrom and Foot Locker in Q2

The second-quarter earning reports are in, and there’s a lot to digest.

After department stores have faced a difficult few years, with hundreds of store closures and layoffs, digital disruption and dwindling sales, some stores are appearing to have weathered the storm.

Expanding e-commerce has led to boosts for both Macy’s and Nordstrom, with reduced inventory also paying off big-time for both retailers. Stocking less product has also proved fruitful for Kohl’s. As inventory management emerges as a key component of success for department stores, firms that struggle with keeping stock in check — such as JCPenney — continue to see losses.

Although the continued rise of Amazon has worried retailers in recent years, measures to compete with the e-tailer seem to be working for both Target and Walmart — as the two retailers made shareholders happy through increased digital sales and online traffic. For both, brick-and-mortar stores remain important, with Target’s store remodeling and Walmart’s increase in experiential offers paying off.

In the athletic sector, fresh product is key in driving growth.

For Adidas, the Ultra Boost helped lead to a strong quarter — and the brand expects the franchise to hit the 1 billion euro ($1.17 billioin) mark in 2019 as the next generation of the shoe releases. Although Nike has yet to release its Q2 earnings, The Swoosh has also seen a boost in shares, with investors raising expectations in part because of strong sales of the brand’s most innovative styles, like the Air Max franchise.

Meanwhile, Foot Locker — despite better-than-expected earnings —  left investors with more to be desired, with basketball sneakers failing to move yet again. By contrast, running and casual looks drove business.

For major shoe brands outside the athletic realm, keeping product fresh also proved important.

For instance, Steve Madden’s strong Q2 earnings were bolstered by the brand’s trendy product, including fashion sneakers, with seasonable footwear like sandals also selling well.

Despite the industrywide emphasis on releasing new product, both Crocs and Sperry saw success this quarter with their traditional models  — proving that a brand need not fully jump on the trend train to report solid earnings.

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