Oh That Pesky West Coast Port Shutdown

Blame is a funny thing ... when business is good, you don't see a lot of blame being passed around. But when business does not meet expectations, well, somebody has to be blamed, and that somebody sure cannot be Macy's and/or Omnichannel Strategy. More on that in a moment.

Have you had a chance to read through statements from first quarter earnings reports? No? It's free information! Free! You love free! And the documents communicate what actually happened, not results from a survey of 1,339 likely shoppers.

Wal-Mart: US Comps = +1%. E-commerce growth = +20%. Sams Club comps were +0.4% after excluding the negative impact of fuel deflation.

Target: Comps = +2.3%, e-commerce growth = +38%, which comprised a full third of the total 2.3% comp growth (yes, retailers add e-commerce growth to comp growth, inflating perceived retail effectiveness).

Home Depot: US Comps = +7.1% (no talk of blaming a West Coast Port Shutdown here). Favorable (closer to normal) weather, favorable housing bounceback helped.

Costco: Comps = +1% ... comps were +5% if you exclude fuel deflation.

Lowes: Comps = +5.3% (again, no talk of blame here).

Best Buy: -0.7% comp ... major slowing in e-commerce growth (5.3% vs. 29.2% last year). By the way, keep the decelerating e-commerce comp in the back of your mind ... this is about to become a big problem for many, many retailers.

Macy's: Oh, Macy's. Blame. Everybody but the merchandising strategy is to be blamed. They blamed the West Coast Port Slowdown (wouldn't that impact their competition, or just about every retailer?). They blamed weather (though others praised weather). They blamed international tourists (wouldn't that impact the competition as well?). They blamed their own omnichannel staffing reorganization for a temporary disruption. Blame - Blame - Blame - Blame - Blame. Shouldn't omnichannel overcome all of these challenges? Didn't the pundits tell us that omnichannel is the secret to success? Doesn't Macy's self-proclaim themselves as "American's Omnichannel Store"? Then why all the blame? Why? Sales were down -0.7%.

Kohl's: Comps = +1.4% ... how does Kohl's grow sales in the same environment that Macy's blames for hurting sales? Discuss.

Staples: Total sales = -7%. True comps = -0.6%. Staples.com sales only grew by 1%. In North America, sales were down 10%, comps were down 3%, e-commerce was up only 3%. Again, nobody wants to talk about this, but the deceleration of e-commerce growth in retail is going to become a big story (a secret story, but a big story). Nobody wants to talk about outcomes that are opposite of those promised by the Omnichannel Thesis, even though companies are publicly telling us about their problems.

Sears: Ugh.

J.C. Penney: Comps = +3.4%. At this rate, it will take seven or eight years to make up for the 30% drops they experienced a few years ago, and by then, inflation will have set JCP back another 20%. This is the trap that dying brands faces (and believe me, I know something about this). If the dying brand wants to make a change, the change is hated by existing customers. If the dying brand wants to grow, it cannot grow, because existing customers are not capable of fueling growth. Either way, the dying brand struggles to fight the competition. Either way, outsiders say that they have the answers. Outsiders do not have the answers.

Nordstrom: Sales = +9.8% (got that, Macy's?). However, there's all sorts of less-than-optimal numbers buried in the metrics. 50% sales growth at Nordstromrack.com (good). Earnings Before Taxes dropped from 9.3% to 7.9% (may or may not be bad). Full-Line Store comps = +0.5%, while e-commerce growth = +20%. Since e-commerce growth is tucked into comps, this implies that Full-Line Store comps were negative (Macy's will like that). And Nordstrom Rack posted -0.2% cops vs. +6.4% last year (oh oh). Loyalty program growth was +11%, and represented 38% of sales. Given that comps are flat and/or down, this tells you that the Loyalty program isn't truly fueling incremental growth, but may instead funneling customer shift from non-loyalty tender to the loyalty program, which isn't the same thing as "generating loyalty".

TJX: Net sales = +6%, comps = +5%. No blame for weather or port shutdowns here. Isn't that interesting? Some businesses just plow forward, even though they deal with the same challenges other companies deal with.

Gap: #OhBoy. Gap = -10% comp on a -5% comp from last year. Bananna Republic = -8% comp on a -1% last year. Old Navy = +3%. Why do the brands who struggle so much praise omnichannel and get so much press about omnichannel?

Ross Stores: Sales = +10%. Comps = +5%. No talk of omnichannel. No blaming the west coast port slowdown. Sell something the customer wants to buy at a price the customer wants to pay.

Limited Brands: Sales = +5%, comps = +5%. Direct sales = -6% ... again, pay attention folks ... retail e-commerce growth is rapidly decelerating. Direct sales ... that's the website plus print marketing ... declined. Declined! Do you ever hear about that when reading anything in the trade journal / consultant / vendor ecosystem?

Foot Locker: Comps = +7.8% ... the most profitable quarter in company history. No blame, no discussion of omnichannel. Just unfettered success. Think about it.

American Eagle: Comps = +7% on top of a -10% last year. Gross Margins are improved. Gains came from AOV, not from more customers purchasing. You always want more customers purchasing, gains in AOV are always temporary. That being said, you always want to erase the bad taste of a -10% comp, so kudos are earned here.

Urban Outfitters:  Growth in all brands. Growth.

Chicos: David Dyer will retire in 2016. Sales +1.7%. Comps = -0.1%. Lots of omnichannel chatter (again, those who praise omnichannel so frequently correlate with lower sales performance, think about it), Chicos store comps were -2.3%.

DSW: Sales = +9.4%, comps = +5.1%. These folks say they were awarded the "Best Omnichannel Experience Award" at some eBay conference. So here's a case where omnichannel aligned with highly positive sales outcomes. Good job!

Abercrombie & Fitch: -9% comp, Hollister = -6% comp. 'Nuff said.

Aeropostale: Net sales = -20%. Comps = -11% vs. -13% last year. Guess what? They blamed weather and the west coast port slowdown on performance. But there was no west coast port slowdown the year prior, and weather was worse the year prior, and they posted equally horrific numbers a year prior. Hmmm. We need to start applying common logic to what we read.

Dillards: -10% comp. Yeesh.

Belk: +3.3% comp. Online = +36.7%. The companies farthest behind on e-commerce are generally posting monster online comps ... those who captured a ton of e-commerce volume early on have largely plateaued.

Dick's Sporting Goods: +1% comp.

Cabelas: Sales are increasing.

Read the 10-Q statements from retailers and e-commerce businesses. These documents outline business trends that few in the vendor / consultant / trade journal universe will acknowledge.