Macy’s has opened five discounted outlets in the NY area and plans to open a sixth before the end of the year.
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The tepid sales results were posted as the company heads toward its key holiday season.
USA stock index futures were higher on Wednesday after mixed economic data out of China suggested that Beijing may need to provide further stimulus to kickstart growth, even as investors brace for a possible rise in US interest rates next month.
Macy’s fell 4.3 percent to $45 at 8:04 a.m.in early trading in NY.
“We are disappointed that the pace of sales did not improve in the third quarter, as we had expected”, Lundgren said.
But as the critical holiday shopping season ramps up, Lundgren said Macy’s plans to shift into overdrive to better pursue “sales-driving activities”.
Same stores sales dropped during the quarter by 3.9%, missing an increase of 0.2% that analysts predicted.
The company expects earnings per share for fourth quarter earnings to be in the range of $2.54 to $2.64, excluding any additional charges associated with store closings or cost reductions.
As Columbia University business school retail professor Mark Cohen told Retail Dive earlier this year: “I can not nearly imagine buying something at full price at Macy’s anymore”.
Macy’s, Inc.is a station retail company operating stores, Websites (NYSE:M) and mobile.
Net sales fell 5.2 percent to $5.87 billion, the third straight quarter of decline. Mr. Lundgren said he could envision carving out 20,000 to 30,000 square feet from the apparel departments in low productivity Macy’s stores for the Backstage concept.
Profit was down to just over $118 million equal to 36 cents per shares, compared to past year during the same period of $217 million equal to 61 cents per share. Miserable full-year and current quarter guidance by Macy’s, Inc.
Yet Stifel analyst Richard Jaffe remains a bull, convinced that strategic initiatives, which include the deal announced today with Italian eyewear firm Luxottica Group (LUX) to bring as many as 500 LensCrafters to its stores over the next three years, will pay off down the road. Macy’s said on Wednesday that it had ruled out the possibility of spinning off properties into a publicly traded real- estate investment trust, because it doesn’t want to be saddled with extra debt and expensive lease payments.
Macy’s said it would also continue to consider unloading certain real estate.
“Consumers are going to have a field day, because we’re going to have lots of values out there”, he added. Zacks cut shares of Macy’s from a “hold” rating to a “sell” rating in a research report on Wednesday, October 14th.
Comp sales decreased 3.6 percent on an owned-plus licensed basis; on an owned basis, comps declined 3.9 percent.
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In terms of earnings, Macy’s Inc is expected to announce earnings of $0.5 when the company next releases their earnings report on 2015-11-11.
