Macy’s shares fall on sales miss, retailer slashes outlook

A pedestrian carries a Macy’s Inc. shopping bag while walking past a store in New York.

Idris Talib Solomon | Bloomberg | Getty Images

Macy’s is set to report quarterly earnings before the bell on Thursday.

Here’s what analysts are expecting, based on Refinitiv data:

  • Earnings per share: Breakeven
  • Revenue: $5.32 billion
  • Same-store sales: a drop of 1%

Earlier in the week, Kohl’s delivered dismal results that led to a broader selloff among department store retailers, including Macy’s and Nordstrom. Results from big-box retailers Target and Walmart were much brighter.

The group faces increased pressure, as more brands are moving away from wholesale channels, and shopping malls, and trying to sell their merchandise directly to customers.

Some of Macy’s initiatives to keep its business fresh include upgrading its mobile app and tiered loyalty program, adding stop-in shops to some Macy’s locations for popular brands and getting into the clothing rental and apparel resale businesses, as younger shoppers are favoring the likes of ThredUp, Rent the Runway and Stitch Fix.

Last quarter, however, heavy markdowns used by Macy’s during the spring season to clear unsold merchandise weighed terribly on profits. And inventories built up, which CEO Jeff Gennette cited as a core “challenge.” The mishaps led Macy’s to slash its profit outlook for fiscal 2019, and it has since been calling for adjusted earnings of between $2.85 and $3.05 a share.

Macy’s has been calling for net sales to be about flat for the year, with same-store sales expected to be flat to up 1%.

Macy’s shares are down nearly 50% this year, while the S&P Retail ETF (XRT) is up about 6.5%. Macy’s has a market cap of roughly $4.6 billion.

This is a developing story. Please check back for updates.

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