The bounceback was largely to be expected after a dismal comparable quarter last year, when stores had to close due to Covid-19 restrictions. A comparison to pre-pandemic numbers yields a more sober outlook: Measured against the same quarter in 2019, Kohl’s net sales declined 4.2%, while comparable sales at Macy’s fell 10.5%.

One positive surprise was a turn to profitability for the two department store giants; analysts polled by FactSet had expected a net loss from both. But that was partly thanks to factors outside of the retailers’ control: Port congestion has led to less inventory across the apparel industry, leading to more full-priced selling. Inventory declined 25% at Kohl’s compared with a year earlier and fell 14% at Macy’s.

Kohl’s shares fell 10% after it reported Thursday, and Macy’s is down around 5% since reporting earlier in the week. Yet they are both trading at prices higher than pre-pandemic levels.

That seems hard to justify. The truth is that department stores were losing customers before and during the pandemic, and will probably continue to do so after it. While Kohl’s and Macy’s sales remain below pre-pandemic levels, off-price and big-box retailers have seen their apparel sales increase. At TJX’s Marmaxx division, which houses T.J. Maxx and Marshalls, sales in the quarter ended May 1 were up 14.4% compared with the same period in 2019. Target’s apparel sales grew 29% over the comparable period.

These competing retailers gained more share last year as they saw more resilient apparel sales than department-store peers. Target’s apparel and accessories division alone brought in $14.8 billion in revenue last fiscal year, not far behind Kohl’s $15 billion in net sales and $17.3 billion at Macy’s. Back in 2015, sales from Target’s apparel and accessories division only brought in roughly half of Macy’s top line.

More normal back-to-school and holiday seasons later this year are exciting prospects for sure, but by then it is more likely that the industry will be better stocked as supply bottlenecks ease. That means more pricing competition and potential pressure on margins.

To their credit, both Kohl’s and Macy’s do have initiatives in place to lure shoppers in. Kohl’s is planning to open Sephora shops in 200 of its locations later this year, while Macy’s is looking to expand selection in higher-demand categories such as toys, health and wellness, food and wine, pet care and home décor.

The problem is that competitors have much more ammunition to chase customers after a resilient 2020. Kohl’s and Macy’s capital expenditure budget combined for this fiscal year tally up to the conservative end of what TJX Companies plans to spend and roughly a third of Target’s expected capital spending.

Summer is almost here, and the air conditioning may draw even more shoppers back to the department stores. Investors tempted to follow them may want to hold off.

Write to Jinjoo Lee at jinjoo.lee@wsj.com

Corrections & Amplifications
Kohl’s reported earnings Thursday. An earlier version of this article incorrectly said it reported earnings Tuesday. (Corrected on May 20)