Macy’s shares tumbled on Thursday after the US department store chain said a key sales metric fell more-than-expected for the ninth consecutive quarter.
Shares in the Cincinnati-based company fell 9 per cent after it said like-for-like sales, a key industry metric, fell 5.2 per cent, steeper than analysts estimates of a 3 per cent drop. That came on top of a 6.1 per cent drop in the year ago period.
Including licensed sales, same-store sales fell 4.6 per cent, worse than analysts’ expectations for a 3.5 per cent drop.
Net sales fell nearly 8 per cent from a year ago to $5.34bn, compared with Wall Street estimates of $5.45bn.
Profits fell to $70m or 23 cents a share in the three months ended April 29, compared with $116m or 37 cents a share in the year ago period. Adjusting for one-time items, the company reported earnings of 24 cents a share, falling well short of Wall Street estimates for earnings of 35 cents.
Slowing foot traffic and rising competition from online retailers and off-price retailers like TJX Cos, the company behind TJ Maxx and Marshalls that sell branded clothing at a sharp discount, has hurt sales at department stores. And Macy’s has also warned previously that the strength in the US dollar has hurt tourist spending.
Macy’s, which operates more than 700 department stores under the Macy’s and Bloomingdale’s brands and 125 specialty stores, is continuing its turnround efforts under Jeff Gennette, who took the top job from long-time leader Terry Lundgren in March. In an effort to get back on track, the department store chain said earlier this year it could cut up to 10,000 jobs and shutter 100 stores in order to cut costs even as it works to monetise its vast real estate holdings and revive sales.
The company launched Backstage, its own off-price concept and has sough growth through partnering with beauty and spa chain Blue Mercury. JC Penney has previously noted that its tie-up with Sephora has helped lift sales at its department stores.
Looking ahead, the company reiterated its forecast for comparable sales, including licensed sales, to decline between 2 to 3 per cent and for total sales to fall between 3.2 and 4.3 per cent in fiscal 2017.
Macy’s shares are down 18 per cent so far this year.