NEW YORK – Macy’s Inc. reported that its third-quarter earnings more than doubled as it continues to cut costs. But the department store chain reported weaker-than-expected sales as it continues to have a hard time pulling in shoppers into its doors.
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The report, released Thursday, underscores just how challenging the holiday shopping season will be.
Like all department stores, Macy’s has wrestled with weak sales as customers go online and also increasingly spend on things other than clothing. It’s facing stiff competition in the clothing world as online leader Amazon expands further into fashion.
To turn its business around, Macy’s has cut jobs and closed some locations. It’s been expanding into off-price stores and launched a loyalty program last month that it hopes will bring more shoppers to its stores. Still, it hasn’t been able to reverse a slide in sales. The company reported that revenue at stores opened at least a year was down 4 percent for the third quarter, worse than the 2.9 percent drop that analysts expected. The decline marked the 11th straight drop for the key measure.
Macy’s is increasing the number of temporary workers it’s hiring for distribution and warehouses for the holiday season as it chases fast-growing e-commerce sales. But its overall holiday hiring will fall nearly 4 percent.
Macy’s said that its fiscal third-quarter net income was $36 million, or 12 cents per share. Earnings, adjusted for one-time gains and costs, were 23 cents per share.
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The results topped Wall Street expectations, but the bar was set low. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 19 cents per share.
The Cincinnati department store operator posted revenue of $5.28 billion in the period, which missed Street forecasts. Three analysts surveyed by Zacks expected $5.31 billion.
Macy’s expects full-year earnings in the range of $2.91 to $3.16 per share.
Macy’s shares have decreased 51 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 16 percent. The stock has dropped 54 percent in the last 12 months.
Shares rose nearly 2 percent, or 35 cents, to $17.90 premarket trading Thursday.
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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on M at https://www.zacks.com/ap/M
