Macy’s cut its forecast for earnings this year in its quarterly results out Wednesday.
Its expectations for profits are now lower because people just aren’t shopping in malls the way they used to.
The retailer now sees adjusted earnings per share in a range of $3.15 to $3.40, lower than the previous guidance for $3.80 to $3.90 and less than the Wall Street estimate for $3.81.
Macy’s shares fell by as much as 7% Wednesday in early trading.
Here’s what CEO Terry Lundgren said in the earnings statement (emphasis ours):
We are seeing continued weakness in consumer spending levels for apparel and related categories. In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook. Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy’s and Bloomingdale’s are key destinations, as well as a slowdown in some center core categories — further intensifying the challenges associated with growing topline sales revenue.
Macy’s said it was looking into proposals from potential partners that want to enter joint ventures involving its mall stores and other flagship locations. It will also continue to look for ways to generate revenue from “unproductive real estate,” the company said.
In January, Macy’s said as many as 3,000 employees would be affected by a restructuring; about 165 senior executives at Macy’s and Bloomingdale’s had the opportunity to voluntarily leave. The company also listed 40 stores to be closed.
Macy’s reported adjusted earnings per share of $0.40 for the first quarter, beating the forecast for $0.36. Its net sales fell for a fifth straight quarter and totaled $5.8 billion, lower than analysts’ forecast on Bloomberg for $5.93 billion.
Comparable-store sales, or sales at locations open for at least one year, fell 6.1% at stores owned by Macy’s, more than the forecast for a 3.1% drop.
NOW WATCH: The famous #FollowMeTo Instagram couple who travel the world together are the new faces of one of Macy’s brands
Business Insider Emails & Alerts
Site highlights each day to your inbox.