lundgren thinks more seasonable temperatures and less drastic drops in tourist spending are helping retail right now, he also thinks it's time for consumer spending to swing back to more discretionary goods like clothing. >> the consumer has been spending. they have just been buying automobiles and they have been buying home improvement, paying for medical expenses and paying all these things that are not sold by me, and so, you know, i think this is good news because they don't need another car now. we've had record sales of cars. don't need another car and don't need to fix their home anymore. they did that. home depot has been awesome. so it's my turn. it's our turn. >> reporter: if lundgren is right, it could mark the end of a year long downturn for department stores. for "nightly business report," m courtney reagan. >>> macy's did well, but shares of mall operators did not do so well on news that macy's planned to cut 100 stores. the nation's largest mall operator simon property growth fell along with macerich and kimco reality. >>> kohl's contributed to today's stock market optimism.

terry lundgren was named ceo in february 2013.t about half of its value since that peak. the main challenge for macy's and for all department stores can be seen in this chart. people just aren't buying stuff in malls. they are spending their money on internet sales, which is this orange line and eating out which is the white line. not visiting department stores. it has been relatively flat for a long time. relatively flat since 2007. it's not clear what would change that trend. to combat these challenges macy's is closing underperforming stores. this equals 100 full-line stores out of 728 locations. you have slowing sales and profits that have attracted activist investors who are pushing macy's to monetize the company's store portfolio. hedge fund star board values it billion, which is double the market cap right now. a lot of pressure to change how they deal with their real estate. david? david: we will stay with macy's and bring in the company's ceo terry lundgren on the telephone. i use much for joining us today. we have your e

vonnie: that was terry lundgren with david weston.f you check out top charts on the bloomberg, they have moved that lately -- back in positive territory, leading the s&p 500 today. this downturn was what it looked like. even with pressure from the board, it looks like he is changing his mind and the stock is improving. coming up in the global battle of the charts, we look at what is driving some stocks including retail stocks. >>>> it is time now for our global battle of the charts. we take a look at some of the most telling charts of the day and what they mean for investors. you can access those charts by running the function featured at the bottom of your screen. kicking things off is oliver reddick. take it away. >> i am going to look at something in particular that i guess is important this week because we have eia reports for oil. i'm going to be looking at the s&p 500, the energy companies. just a sector group versus oil. what is interesting here is this trend the past couple of weeks where it decoupled from what was happening w

earlier, terry lundgren, the chief executive officer, talked about. back the brick-and-mortar presence. >> the united states is over stored. we are getting in front of what we know is a trend that has been occurring and that is customers are balancing their spending with online as well as in stores. online retailers like amazon pose a serious threat, the declining u.s. luxury sales coach and like michael course is hurting the macy's bottom line. thank you so much for coming on. retail earnings are out so what is the take away from you? >> these retailers are finally taking their medicine and doing what they have known they needed to do the interesting thing about terry lundgren's comment about getting ahead of it, they are not. they're catching up to where they should have been. they have toy think about things so what does the future look like for macy's? the stock is up a lot because i think people are encouraged by what they are doing. the incoming ceo came out and said we need to rethink the stores in a different way and this is positive for peopl

terry lundgren was on "squawk box" talking about it's our turn for the consumer to start spending onnt or cars, spent on improvements. that's why the retail sales report we get will be key. >> i completely agree. it's interesting saying it's our turn now. i just wonder though whether that is sustainable because is very much funded by credit. we've seen such high consumer loan growth all through the year, in fact, but particularly in q2 and i wonder how sustainable it is. is it based off skbres rates. >> and how much is baked in and whether the department stores do start to take the right moves. may have sis announcing 100 store closures. nordstroms been investing in online retail and growth nichetives are investors going to start rewarding the beaten down sector. >> 100 store closures was just the start. he pointed out an amazing fact. here in the u.s. there are five times the square footage of storefronts compared to other developed countries. >> we're overstored. >> massively. structurally knees guys are still challenged. the pop in the share price yesterday massive as it was was a

we will hear what ceo terry lundgren has planned.he street" straight ahead. ♪ ♪ you can call me ♪ >> good morning. welcome back to "squawk on the street." i'm sara eisen with david faber and kayla tausche live at post nine from the new york stock exchange. carl quintanilla with us from rio this morning. he will be joining us in a moment. show you what's happening with the markets. we've got a rally going on, on wall street. it is building throughout this morning. the dow is currently up 74 points. s&p 500 up 0.3%. the nasdaq up 0.4%. strength in retailers like macy's and kohl's, those earnings well received. wti crude is jumping a bit here up above $42 a barrel. our road map starts with donald trump speaking this morning on "squawk box" as expected he made some bold statements. we'll break them down. that blowout quarter for macy's, kohl's reporting a beat, both stocks are surging. >> team usa continues its winning streak. we will go live to rio for the highlights. >> start with politics as we mentioned, republican presidential nomin

this is video of stuart earlier this year speaking at the funeral of fallen scott lundgren. tonigh-ups in the department were blindsided about the news about the chief and say it came ther time captain maover as acting chief of police. >>> an l.a. woman is in a bay area jail accused of trying to sneak phones and heroin into san quentin for a friend on death row and somehow she managed to get through a met a decker. kpix5's -- metal detector. kpix5's andria borba is in our news witmost got away with smuggling. >> almost is th word. tonight there is an investigation happening into how multiple of security inside the east gate quenti was thursday inside the walls of the marin county prison this woman, 47-year-old terry nichols, was visiting this man, bruce sitting on death row -- millsap, sitting on death row convicted of eight murders in ornia. the pair was visiting when a guard noticed a ziploc bag in the trash. >> it was consistent low in purchase from ines. >> reporter: nichols and millsap were separated and she allegedly feup. prison officials found 18 smartphones, charger

fortunately we are joined by macy's chairman and ceo terry lundgren.ongratulations. >> thanks. good progress, becky. >> there's a lot to dig through. you beat by a big margin. you're sticking with your guidance for the year. maybe this news about closing a hundred stores soon by the beginning of 2017 you're planning on closing a lot of these. that is a big action. why? >> because we're a company that doesn't sit still. i think you know that. you've seen us through the years. whenever there's a setback in the company, we've been first in the industry to take an aggressive stance at moving us forward. that's just part of it. by closing a hundred stores, which is never easy, we're getting out in front of this. here's the facts. in the united states there's 7.3 square feet per human being of retail space. okay, that's just ridiculous when you consider that in the uk it's 1.3, in france 1.7. we have five and a half times the number of retail physical locations in america per capita than any other country in the world. and so there has to be a rationalizatio

this is video of stuart earlier this year speaking at the funeral of fallen officer scott lundgren. tonight kpix5 learned some higher-ups in the department were blindsided about the news about the chief and say it came out of nowhere. in the meantime captain mark kohler has taken over as acting chief of police. >>> an l.a. woman is in a bay area jail accused of trying to sneak phones and heroin into san quentin for a friend on death row and somehow she managed to get through a met a decker. kpix5's -- metal detector. kpix5's andria borba is in our newsroom with a look at how allegedly that woman almost got away with smuggling. >> almost is the operative word. tonight there is an investigation happening into how multiple layers of security inside san quentin were beaten. a sign on the east gate of san quentin says no narcotics, but perhaps cell phones should be thrown on that list as well. it was thursday inside the walls of the marin county prison this woman, 47-year-old terry nichols, was visiting this man, bruce mill sam, sitting on death row -- millsap, sitting on death row convi

terry lundgren agrees, but thinks consumers have been spending only in concentrated categories that benefit home depot and lowe's. we'll find out this week whether that continues or if consumer dollars of shifting once again. department store results were better than expected, though on low expectations. clothing spending has been weak, so even a little positive news got a lot of attention. and if early back-to-school clothing spending has been good for kohl's and denim is good for macy's, maybe american eagle, gap and americ outfitters will see growth as well. at least for now there are signs of renewed life. i'm courtney reagan. >>> we turn to the devastating floods in louisiana. tens of thousands of residents have been rescued from their homes. about 10,000 are in shelters until the waters recede. at least five deaths are linked to the flooding. the governor declared a state of emergency over the weekend and described the floods as unprecedented and historic. the hardest-hit areas have been around baton rouge where 20 inches of rain fell over the weekend and where more is expected. >>> a

trump interview, but lundgren had another yoet. he said the consumer is spending just not at our store. >> steve: that was an amazing admission. it's our turn. >> which is another reason to be excited about today. you know what happens at 830. >> retail sales. >> the question is did andrew know. >> do we do a tease at 5:50 a.m. next time you're in. i think you. >> i'm not always this excited about the show. dan and larry cut low and kevin o'leary and retail sales. it's exciting. i think you would have done a better job. >> in other words, tag, you're it. >> i'm happy to do it for your, andrew, but i'm not always this excited about the show. i'm going to read these stories now. here are the big stories we're watching on today's economic agenda. reports at 8:30 a.m. retail sales come out at 8:30 also. 10:00 a.m. be on the lookout for business inventories. that could influence the gdp outlook and consumer sentiment for august. just one earnings report to keep an eye on, jcpenny will release results. notable comments from san francisco

terry lundgren has been six lies but it is grim. much of this is the market and how much of it is decisions they are making at macy's in tom: ask them why they took out the wooden escalators. david: bless you, tom keene, i love those. tom: you must watch. bill lee is with us as well as doug kass. you sure did apple so bring it up now. every time around, there is not a reason to buy apple. what about this time around? $1.20.re did it at about i resorted the stock recently after its rally from the high 80's. my view is that the apple upgrade, the product upgrade cycle, the series of six, was the last important upgrade cycle for the company. victimlike disney, is a of its past successes and it will be difficult with new products to move the needle. tom: i agree but cannot they engineer cash flow? >> they have a cost of capital under 2%. the ceos have to get bold employ cash fast? >> they get better but that's the heart of product to the ravens in general. they don't deploy cash. you have thoughts on whether they should spend on dividen

lundgren: it'll definitely help.a few cents a pound on the oil, which can make a difference of five, possibly ten dollars a ton on whole coonseed. of course, any time you have more demand, it's not a bad thing; you just have more.. ifif nothing else, even the pricece is the same, u got morere options of places to go. narratoror: options, , choices. biodiesel creates opportunity on many different levels, creating hope for people in ways that are happening right now. lundgren: i'm really excited about it. it's intereresting to think that something we've always thought of as food, a food product can be used for something else like that to run our cars and trucksks. of course,e, any time we can decrease our depependence on foreign oil, it's a good thing. i just love it down here. a little bit hot sometimes, but i don't think i'd take anywhere else. hopefully, we canan just keep this place going and stay around. (thunder crashing) nanarrator: for decades, farming in america hahas been drawn deeper and deeperer into a rele

he will replace terry lundgren.cy's stock price named ceo.ren was you can see the steady decline since last july, losing half of its value. the main challenge for macy's is encapsulated in this chart. people are spending their money on internet sales and eating out. what they are not spending it on is department stores and paying for things there. it is not clear what would change that trend. helpedrise that this has to drive down comparable sales. on top of slower traffic, the stronger u.s. dollar is weighing on sales to foreign tourists. been a bright spot, online sales providing momentum with brick locations on the decline. ,o combat these challenges macy's is closing underperforming stores and expanding its discount offerings. announcements, macy's estill has more locations now been 2006. slowing sales & profits have attracted activist investors, pushing the company to monetize its store portfolio. the firm values macy's real estate at $21 billion, double cap right now. macy's is looking to capitalize through jo

on a programming note don't miss terry lundgren on "squawk box."ll be able to ask him about his earnings, but to react to the trump interview that will proceed that. >> absolutely, as for the broader markets, the 10-year treasury on the right now. hovering above 1.51. at least in a small way that's pushing yields above 1.51. >> absolutely. 16 year high for that spread. highlighting the difference on monetary difference between the countries. >> joining us now from new york is joe lo vornia. is the current theme dominating the markets which are near record highs on stocks like central banks and others are in an easy growth mode for a long time of a shallow recovery and that's a positive environment for stocks. >> the last point -- the only point people on the fixed income side would disagree with you on in the sense that you're right the central banks are fully involved. the bank of england did more qe than people thought. it's helped push yields down. in fact the auction they couldn't buy everything they wanted because investors wouldn't part with

terry lundgren macy's ceo explained the decision. >> we've been first in the sfri to take a very aggressive by closing 100 stores is not easy. we closed 40 last year. we're getting out in front of this. >> kohl's beating forecast as mentioned. thanks to warmer weather lifting demand for summer clothes. nordstroms following suit. fell less than expected there. partly thanks to anniversary sale. >>> now, the how net worth individual has long been a mainstay target of the travel industry. some companies are now moving to tap a particular type of highly value ed customer, namely the single female traveler. they spend more on travel, they're creating female focused luxury holidays to capture the growing trend. debra is a managing director of dukes hotel. oliver williams is head of wealth insight. welcome to you as well. >> debra, let's start with you. dukes hotel, in which way are you in particular focused on this ultrahigh net worth female traveler. >> we see great growth in the female traveler. we chose to actually do a female friendly flaws at the hotel. not only in the uk and london, but als

retail earnings would lead some to believe that this trend of cars and homes as even terry lundgren said yesterday, ceo of macy's, even though on his way out in early '17. now it's our turn. maybe the consume letter come back, early stages of coming back to buy that kind of stuff? >> scott, i want you to be right. i'm in the retail space you know that. to be honest, what happened with retail earnings, such a low bar, easy for them to clear the expectations really low. in fact, almost across the board you saw same-store sales decline. beloved jcpennejcpenney, same s growth but outlie. expectations were low. there is still value in that space. you need to see retail sales figure stronger than they have. >> look at department stores, rallied all summer. jim nailed, you know, a lot of that idea, but now they're back at their five-year average valuations, and one of the main boosters in addition to their being very low expectations short interest. take a look at jw nordstrom had a 16% spike in short interest between may 1st and june 1st. that's set up an amazing summer. look at jcpenney, 30%

listen to what ceo terry lundgren said on "squawk box" when macy's reported earlier this month. ridiculous when you consider in the uk it's 1.3, in japan it's 1.7. we have 5 1/2 times the number of retail physical locations in america for per capita than any other country in the world, and so there has to be a rationalization. and we're not waiting any longer. we're taking the stance. we're going to still as courtney said, 530 stores in all the key markets. >> no one has said it better than terry. i thought that really summed things up. yet you know what, the only real consolidation of retail was the dollar tree bought family dollar. it's ridiculous we haven't seen more deals in this space. capacity must be taken after mergers if that cohort is going to come alive in a sustained fashion. nowhere is there more powerful need for mergers than in technology. it is exhausting to even ponder how many companies make devices. the balance of power so tilted toward the big customers like apple and against the lilliputians that supply them. the idea is hanging thick in the air. for example

you have to sell me that fortress lundgren is going to survive.uch and feel matters. we prefer nordstrom. t.j.- we like ross and maxx. tom: do women still need to touch the merchandise, or are they going to buy it off amazon? oliver: the burden is on stores to transform. tom: robert burke was on the other day. you were so good at this. what do you mean when you say abercrombie & fitch or nordstrom's has to transform? oliver: bring excitements back -- bring excitement back to the stores are there are changes in products. b leaders. it is a lot about duration. tom: it is about finding a size 5. oliver: it is about that, too. but it is also allocating inventory at the right time. i know you are concerned about sizes. francine, youean, go to the stores and you cannot find what you want, so you go to the internet. aboutne: i know it is all franchises, but i want to buy something that i liked her whatever product you sell me, you are only going to attract customers if it looks right, that's right. so why are we not -- if it looks right, if it fits right

what terry lundgren and jeff jeanette are seeing they are taking some of the money and saving from closing these stores and the stores that they are keeping, they are going to revest in them and make it a better customer experience and that may include from getting the maryland better to doing new things they don't have at macy's right now. urban outfitters, the retailer, a couple of years ago they bought a pizzeria. want to go for a maybe i go to outfitters. >> there is something to be said for going into the store and trying something on and experiencing it. do you know what i mean? ? >> i know. you and i talked about that. i have that too. >> i don't know if it's going to fit or whatever. there is an opportunity here one would think. >> there is an opportunity for a certain generation of millennials, they grew up shopping online a know. to get them in the store you have to give them something more you can touch and feel the merchandise. that feels to me. i'm not that kind of guy because i want to put it on and make sure it fits on if i buy it because it's a half if i buy it on online. t

opening print tomorrow and i hope it's higher but that is one i liked terry lundgren, like wlaed he does but that brand has been mr. pressure for a lot of months here. >> yeah. a lot with other department stores. shake shack is out and numbers are lower. >> just did earnings per share and 14 sent a piece and analysts looking for 13 cents and revenue ahead of estimates at $66.5 million. and as i mentioned, it comes down to comp sales and in the quart ear slight miss 4.5% and still a miss and analysts looking for 4.the%. and there are positives in this report because they have raise and revenue guidance for the year and that range of 253, $253 million to $256 million, comps in line and as i mentioned right now, the stock is trading up pretty high valuations. so it is show me time and looks like the markets are selling off on the comps. back to you. >> coming off the highs, down the.25 percent. brian, do you like shake shack? >> not so much. i get it, it is a unique type of product. when i look at bigger picture it appears that people are spending less money out at restaurants at this time.

terry lundgren explained it this morning. >> whenever there's a setback in the company, we are first in the industry to take a very aggressive stance at moving us forward and so that's just part of it. by closing 100 stores, never easy, by the way, we closed 40 last year and we are getting out in front of this. >> he agrees the u.s. is over-stored, especially as consumers shift to online at macy's and elsewhere. the store that is remain are going to be getting makeovers like added vendor shop s technologies and staffers. the strength of the clothing sales in the quarter of macy's and kohl's. the strength in junior and young men could be a good start to back to school shopping, a category that typically tends to get bought later in the season, back to school and see what their friends are wearing and then they go shopping. >> how does that work? scope each other. if nobody bought anything -- >> i know! that's probably true. somebody has to start the trend. i think it's my nephew. he is on trend with his glasses. >> as a kid. i was going to say, they talked up the partnership of undera

spend and i think, you know, courtney may have something to say about this but the idea of terry lundgrennd spending but not at macy's or where it's captured. maybe buying more services. taking more trips. doing things that aren't necessarily captured in the standard or traditional retail sales places. >> yeah. i think that is really true. what terry had said is that's the pattern for sometime. consumers buying cars and making home improvements but how many cars do you need is what he said. how much can you improve the house in a short period of time? maybe it is his turn, a turn for retailers to get some more of that now. >> ask bill griffeth how many golf clubs he needs. >> that's the thing. is this a demographic play? are the boomers, we were the shop until you drop generation. maybe we have shopped ourselves out and the millennials -- i'm just speaking from experience, they're not exactly big shoppers themselves. are we seeing that kind of a play, play out here, do you think? >> i think it's important questions that retailers are trying to figure out. structural or cyclical? what's th

so even macy's ceo terry lundgren agrees the u.s.ay too many stores and investors see the shrinking store fleets as prudent choices. the malls aren't that upset. occupancy remains steady and new tenants bring in higher rents for square foot. retail days, the mall's top choice was to have a sears and jc penny as anchor tenants and used to draw traffic, strong rents and tenants. clauses are sometimes writ noon other smaller retail tenant leases allowing an early release from an anchor retailer like macy's leaves. it doesn't mean the death of the mall. the mix has been changing with consumer preferences. less about selling physical goods, more about experiences. with an increase in fitness, education, medical, food and beverage and religious tenants. in fact, ten years ago, food and beverage made up 5% of the retail mix of the mall. now it's 30%. according to jll. many working with the pals say the new mix is good for the reits, new tenants come in with new leases often garnering higher rents. department stores could be paying single di