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The holiday season raised questions about the future of department stores

Department stores apparently didn’t have customers biting this holiday shopping season.

This week, Macy’s, JCPenney, and Kohl’s all reported weaker-than-expected sales results for the holidays, sending their stock prices down sharply and casting doubt over whether department stores can thrive in a new era of retail dominated by Amazon.

“The holiday season began strong — particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” Macy’s CEO Jeff Gennette said in a statement to the press on Thursday.

Macy’s said that same-store sales, including licensed departments, were up 1.1% during November and December. It lowered its sales growth and profit forecasts for the year.

Department stores have struggled in recent years thanks to the rise of e-commerce and declining foot traffic to malls. Meanwhile, online rivals such as Amazon are thriving.

Amazon announced a record-breaking holiday season and said that more items had been ordered worldwide than ever before.

Analysts have pointed out that Macy’s results were especially concerning given that it seemed to have turned a corner in its previous quarterly earnings results, when it reported stronger sales growth.

“Macy’s was not up against particularly challenging prior year comparatives. As such, its comparable sales growth is rather disappointing,” Neil Saunders, managing director of GlobalData Retail, wrote in a note to clients on Thursday.

He continued: “The weak holiday performance now raises a big question mark over Macy’s recovery strategy. This had been gaining traction, but it has been let down by Macy’s inability to get the basics of retail right across all parts of its business.”

JCPenney’s results were gloomier. On Tuesday, the department store reported that same-store sales were down 3.5% on a shifted basis and said that it would be looking to trim its store fleet this year.

Read more: Macy’s and JCPenney are kicking off 2019 with a string of store closings

Kohl’s, which has been considered somewhat of an industry anomaly as it has reported strong sales growth and avoided store closures, saw its stock tumble more than 6% on Thursday after reporting a 1.2% increase in same-store sales in November and December.

But some analysts say this reaction may be overblown.

“The main takeaway from Kohl’s numbers is not that growth has come down a bit. This is to be expected. Rather it is that Kohl’s is executing and delivering in a consistent way with some good progress on both the top and bottom lines,” Saunders wrote.

Kohl’s CEO Michelle Gass said that the team was “delighted” with the results.

“The organization once again delivered a very strong holiday that topped last year’s exceptional holiday season,” she said. Kohl’s reported 6.9% growth during the holiday season in 2017.

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