- Macy’s reported disappointing third-quarter earnings Thursday that showed a decline in same-store sales and a slashed full-year outlook.
- Shares fell as much as 9.1% in early trading on the news.
- The department store has struggled to make meaningful gains during a tough year for retailers.
- Watch Macy’s trade live on Markets Insider.
Macy’s standing as the worst-performing stock in the S&P 500 this year is getting stronger.
Shares of the retailer fell as much as 9.1% in early trading Thursday after it reported quarterly earnings that missed analyst expectations. The report comes amid a slew of disappointing retailer earnings challenging consumer confidence before the holiday season.
Here’s what the company reported, versus what analysts surveyed by Bloomberg expected:
- Adjusted earnings per share: 7 cents reported, versus 1 cent (expected)
- Revenue: $US5.17 billion reported, versus $US5.30 billion (expected)
- Same-store sales: -3.9% reported, versus -1.2% (expected)
Macy’s also cut its profit outlook for the year, saying it now expects adjusted earnings per share to be between $US2.57 and $US2.77, where it previously saw $US2.85 to $US3.05. It’s now forecasting same-store sales on an owned plus licensed basis to be down 1% to 1.5%, where it previously expected sales to be flat or gain 1%.
“Our third quarter sales were impacted by the late arrival of cold weather, continued soft international tourism and weaker than anticipated performance in lower tier malls,” said Macy’s CEO Jeff Gennette in a press release.
The company also saw a negative impact in the quarter from issues with its website, which Gennette said was temporary. “The site is upgraded and our customers can expect an improve experience this holiday season,” he said.
Still, sales at stores owned and licensed by Macy’s for at least 12 months were down 3.5% in the quarter, more than the 1% decline Wall Street expected. It’s Macy’s first decline after seven quarters of gains in same-store sales.
The company has struggled to stay relevant as the retail landscape changes during a tough year for department stores and other retailers. In addition, heavy discounting and a glut of unsold merchandise have weighed on Macy’s profits in the past.
This quarter, Gennette said the store was able to clear out some of the extra merchandise, leading to “significantly improved margin compression.”
Macy’s is down 50% year-to-date through Wednesday’s close.
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