With the new retail calendar year, a slew of retailers — including Target, Macy's, Kohl's and Nordstrom — have joined others in moving to stop reporting monthly sales.
Also bowing out of the practice is Stage Stores and Bon-Ton. TJX Cos., the parent of T.J. Maxx and Marshalls, will stop reporting beginning in April. J.C. Penney, Dillard's and Saks stopped reporting last year.
That leaves the monthly retail sales recap to under 20 retailers, with the few majors — Costco, Victoria's Secret parent Limited Brands, Walgreens and Ross Stores — mixed with stores such as Zumiez, The Buckle, PriceSmart, Rite Aid and Fred's. The even-slimmer store base makes it nearly impossible to gain a decent read of sales trends that traditionally arrived on the first Thursday of each month.
In the nineties, over 100 retailers reported sales on a monthly basis with the number dropping to around 75 by the early part of the last decade. Liquidations and mergers accounted for some of the exits but many of the majors — including Home Depot, Lowe's, Sears, Dollar General, CVS, Best Buy, Toys "R" Us, Starbucks, Barnes & Noble — moved away from the practice. Walmart discontinued reporting monthly sales in May 2009.
For retailers, ending such reporting obviously reduces any expenses or time spent delivering the brief reports but many public companies had argued the monthly number puts too much emphasis on short-term results.
"This decision is based on discussions with many of our investors and is consistent with the practice of the vast majority of our retail peers," said John Mulligan, Target's EVP and CFO, when Target announced its shift last September. "We believe aligning our sales guidance and reporting with disclosure of our quarterly financial results will create a longer-term focus and provide greater understanding of our sales results in the context of our overall financial performance."
On the pro-monthly sales side, some have argued that monthly sales supplement government statistics to provide a better read on the health of retail and the economy. While a Wall Street backlash hasn't been heard with the latest exodus of stores, the bigger argument has been that publicly-held stores owe regular updates to shareholders.
Macy's has been in both camps. In 2007, after a tough year, the department store operator stopped reporting because the "confusing" calendar led to misleading results and monthly numbers overly-encouraged a short-term focus. By October 2008, Macy's began reporting again to provide investors "as much information and transparency as possible." In November last year, it quietly announced plans to stop reporting "consistent with the practice of most other retailers."
Will the retail community ultimately regret the shift away from monthly sales reports?