Among the 15 largest U.S. retailers, operating margins in the holiday quarter last year were 11 percent, compared with 9 percent in the preceding nine months. Amid the year-end shopping frenzy, these companies padded their bottom lines, on average, by roughly one-quarter.
Home Depot (HD) and Lowe’s (LOW) may be the only places where a shopper can expect to catch an honest break at the end of the year. Macy’s (M), Bed Bath & Beyond (BBBY), and L Brands (LTD), the company behind Victoria’s Secret, are particularly adept at producing opulent holiday returns.
How can this be, a dewy eyed mall rat may wonder? For one, in the time-honored loss-leader tradition, most shoppers don’t stick to the killer deals. For every $98 flat-screen TV, there’s plenty more to buy at a 98 percent markup.