Evaluating Kohl’s Strong Holiday-Season Sales Performance

Analyst Chuck Grom is a managing director at Gordon Haskett Research Advisors. A regular commentator on financial matters, Chuck Grom recently was featured in Reuters discussing the strong performance of Kohl’s Corp. in the 2017 holiday season. 

Between November and December 2017, Kohl’s posted an impressive 6.9 percent increase in same-store sales, its best holiday performance in 36 months. Store activity checks by research company Retail Metrics also indicate that Kohl’s was one of the most visited department chains in the country during that period. 

Kohl’s sales performance was higher than the 1-4 percent increases reported by JCPenney and Macy’s. According to analysts, this good showing was attributable to the company’s shifting business model away from shopping malls to stand-alone department stores. The performance also follows a revamp of the retailer’s beauty departments, an increased space allocation for Under Armour sporting goods, and a partnership with Amazon for its smart home products.

Retail Prices Were Strong During 2017 Holiday Season

With past experience spanning Deutsche Bank and JPMorgan, Chuck Grom is a Wall Street analyst who focuses on consumer-facing retail segments. A late 2017 Forbes article featured Chuck Grom’s insights into strong holiday sales, which marked an end to “price wars” for the time being.

With the National Retail Federation reporting total retail sales up by six percent in November, with online sales and non-store growing by 10.5 percent, large-scale blanket discounts were not materializing, as in previous years.

Chuck Grom noted that the major winners in this scenario were in consumer electronics, home improvement, apparel, and even struggling department stores. Perhaps the largest beneficiary of the uptick was in the furniture area, with many Millennials hitting their “peak buying years.”

Another contributor to strong prices was appropriate inventories, with retailers not significantly overbuying and thus charging the full retail amount. One related trend seems to be that the Amazon-driven retail price battles are finally coming to an end. As early as July 2017, it was reported that Amazon no longer had lower prices on the full spectrum of items, as compared with Jet.com and Walmart.com.

Cowboys Add to Wide Receiver Depth with Signing of Deonte Thompson

A former StarMine Thomson Reuters No. 1 Earnings Estimator in the multi-line retail sector with CRT Sterne Agee, Chuck Grom joined Gordon Haskett Research Advisors as a managing director in February 2017. In addition to analyzing department store stocks, Chuck Grom is a passionate fan of the National Football League's (NFL) Dallas Cowboys.

The NFL free agency period opened in March and, while the Cowboys have yet to make a significant signing, the team signed six-year veteran Deonte Thompson to a one-year, $2.5 million contract. Known for his speed, Thompson is expected to serve as a formidable threat for the Cowboys passing attack, a role that was filled last season by Brice Butler, who Dallas opted not to re-sign.

Though he wasn't drafted, Thompson signed with the Baltimore Ravens in 2012 but was used sparingly. He recorded a combined 147 receiving yards in two seasons with the team before being released the following season. He had a career-best season in 2017 with a combined 555 receiving yards and two touchdowns split between the Buffalo Bills and Chicago Bears. He also averaged an impressive 14.6 yards per reception.

Wal-Mart Reacts to Tax Reform Through US Employee Wage Increase

A veteran Wall Street analyst, Chuck Grom leverages past experience with JPMorgan and Deutsche Bank as Gordon Haskett Research managing director. With extensive knowledge of consumer-facing retail segments, Chuck Grom’s firm recently provided insight within a Bloomberg article on Wal-Mart Stores, Inc.’s January 2018, announcement that it would increase its starting pay across the United States to $11 an hour.

This wage increase represents a 10 percent gain for employees of the largest retailer worldwide, which has global sales that generate nearly $500 billion annually. The total cost of the wage increase for Wal-Mart will be $300 million, not including one-time cash bonuses also planned. 

With Wal-Mart expected to generate $12 billion in net income in 2018 and achieving $57 million in hourly sales, this amount represents approximately nine days of profits. The wage increase is among the strategies undertaken, including buybacks and price cuts, to utilize the $2 billion in tax benefits realized under the new US tax system reforms. 

The cost of the wage increase, while substantial, is small relative to total operations. As a point of reference, the company’s US e-commerce chief Marc Lore received $244 million in 2016 as part of shares attached to his company Jet.com, which was purchased by Wal-Mart.