“By closing 100 stores, we’re getting out in front of this”.
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(AP) – Macy’s on Thursday reported fiscal second-quarter net income of $11 million.
Macy’s also announced plans to close 100 stores out of its total portfolio of 728.
“Macy’s is committed to treating associates affected by store closings with respect and openness”, the company said.
Department stores have been struggling with stiff competition from online and off-price retailers. That information is expected to come later in the year. Now, the company is rethinking the role physical stores play in an environment where fewer people see the need to shop in them, said Macy’s President Jeff Gennette. “We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand”.
Macy’s said the company will focus its resources on “our better-performing locations to elevate their status as preferred shopping destinations”. On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.03 per share. Just this week, Walmart inked a $3.3 billion deal to acquire Amazon rival Jet.com.
Profit was 54 cents a share, excluding some items, in the quarter ended July 30, the Cincinnati-based company said in a statement on Thursday. That’s down from $217 million, or 64 cents a share, in the same quarter a year ago. The year-over-year decline in total sales largely reflects the closing of 41 underperforming stores in 2015. Shares in fellow department store Nordstrom Inc. rose 5.4%, while J.C. Penney Co. stock gained 4.5% and Target Corp. shares rose 2.7%.
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The company expects, full-year 2016 comparable sales on owned plus licensed basis, sales to decrease in the range of 3 percent to 4 percent, with comparable sales on an owned basis to be about 50 basis points lower.
