Macy’s reported mixed third-quarter results and cut its full-year earnings and sales forecasts, sending shares lower ahead of the opening bell.
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The retailer earned $2 million, or an adjusted 7 cents a share, on revenue of $5.17 billion. Wall Street analysts surveyed by Refinitiv were expecting a breakeven quarter on sales of $5.32 billion. Comparable sales fell 3.9 percent.
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“After seven consecutive quarters of comparable sales growth, we experienced a deceleration in our third-quarter sales,” Macy’s CEO Jeff Gennette said in a statement. The slowdown was steeper than expected, he said, even with a particularly strong quarter a year earlier.
Still, “having cleared the excess inventory we faced earlier in the year, we were able to take a more balanced approach to sales and profit in the quarter,” the CEO added, which meant profit margins were under less pressure than earlier in 2019.
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Macy’s cited the “late arrival of cold weather, continued soft international tourism and weaker than anticipated performance in lower-tier malls” as reasons for declining sales.
Looking ahead, the retailer expects full-year net sales will drop as much as 2.5 percent, compared with its previous prediction that they would be roughly the same as in 2018. Proft will be $2.57 to $2.77 a share, down from a previous forecast of $2.85 to $3.05.
The department-store operator booked $17 million of pre-tax gains, or $13 million after taxes, related to asset sales. Macy’s will sell its landmark building in downtown Seattle and close the store in February 2020.
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The company’s shares were down 49.6 percent through Wednesday while the S&P 500 was up 24 percent. Rival Nordstrom is scheduled to report its quarterly earnings after the close of regular trading in New York.
This story is developing. Check back for updates.