CINCINNATI, United States — Macy’s Inc., the largest US department-store company, cut its profit forecast for this year and posted first-quarter revenue that missed analysts’ estimates as slow mall traffic hurt sales.
Full-year earnings will be $3.15 to $3.40 a share, down from an earlier projection of $3.80 to $3.90 a share, the Cincinnati-based company said in a statement on Wednesday. The company also cut its forecast for full-year sales, citing a double-digit drop in tourist spending and a slowdown in sales of some core categories.
The projection signals Macy’s is still suffering from sluggish mall traffic and increased competition from other department stores and off-price retailers. On top of that, the strong US dollar is weighing on sales to foreign tourists. To combat these challenges, the retailer is closing underperforming stores and expanding its discount offerings. It’s also looking to capitalise on its real estate portfolio through joint ventures that can squeeze extra cash out of its properties.
The weak revenue trends were evident in the company’s fiscal first quarter. Sales fell 7.4 percent to $5.77 billion in the period ended April 30, Macy’s said Wednesday. Analysts projected $5.93 billion, on average. First-quarter profit was 40 cents a share, excluding some items. Analysts projected 36 cents.
Macy’s shares tumbled 8.4 percent to $33.90 at 8:04 a.m. in early trading in New York after the report was released. The stock had gained 5.7 percent this year through Tuesday.
By Lindsey Rupp; editor: Nick Turner, Kevin Orland and Paul Barbagallo.
