{"id":20187,"date":"2015-11-11T17:08:56","date_gmt":"2015-11-11T23:08:56","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=20187"},"modified":"2015-11-12T11:47:23","modified_gmt":"2015-11-12T17:47:23","slug":"macys-stock-plummets-after-profit-and-sales-falter","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/macys-stock-plummets-after-profit-and-sales-falter\/","title":{"rendered":"Macy’s stock plummets after profit and sales falter"},"content":{"rendered":"

By Alex Valentine
\n<\/strong><\/p>\n

Shares of Macy\u2019s plummeted Wednesday after the company posted a 46 percent decline in quarterly earnings and lowered its profit outlook for the rest of the year. <\/p>\n

Shares fell 15 percent to $40.44, the lowest price for Macy\u2019s in over two years.<\/p>\n

The Cincinnati-based retailer\u2019s profit fell to $117 million, or 36 cents per diluted share, from $217 million, or 61 cents per diluted share, a year ago. Earnings were far short of analysts\u2019 estimate of $179 million and 53 cents per share.<\/p>\n

Quarterly sales at Macy\u2019s totaled $5.87 billion, down 5 percent from a year ago. Analysts predicted quarterly sales of $6.1 billion.<\/p>\n


\n\u201cWe are disappointed that the pace of sales did not improve in the third quarter, as we had expected. Spending by domestic customers remained tepid, especially in key apparel accessory categories,\u201d said CEO Terry J. Lundgren in a conference call with analysts Wednesday.<\/p>\n

Lundgren cited a decrease in international visitors to Macy\u2019s flagship stores, including the Chicago location, and an unfavorable currency exchange rate, as culprits for disappointing sales in the quarter.<\/p>\n

Macy\u2019s plans to close up to 40 stores in early 2016 and is exploring the possibility of joint ventures to redevelop its four flagship stores, including Chicago\u2019s State Street location.<\/p>\n

Macy\u2019s estimated its sales for the full year would fall by about 3 percent, down from the earlier estimated 1 percent drop. The retailer reduced its estimate for full-year earnings to $4.20 to $4.30 per share from the earlier forecast of $4.70 to $4.80 per share.<\/p>\n

\"Macy's<\/a><\/p>\n

Sales at Macy\u2019s have steadily missed expectations over the last two years, as consumers have eschewed traditional retail stores in favor of discounters.<\/p>\n

Discount competitors Target Corp. and TJX beat Wall Street profit expectations last quarter, and are expected to report a rise in earnings for the most recent quarter later this month.<\/p>\n

Macy\u2019s is joining the discount bandwagon with the planned launch of 50 stand-alone \u201cMacy\u2019s Backstage\u201d stores over the next two years.<\/p>\n

“Macy’s results reflected a challenging retail environment as the mall anchors are at a cyclical peak and continue to deal with secular changes in consumption,” said Credit Suisse Research Analyst Michael Exstein. “The company’s need to liquidate elevated inventories in fourth quarter could have a negative ‘knock on effects’ on other retailers.”<\/p>\n

Chief Financial Officer Karen Hoguet said Macy\u2019s explored the option of spinning off its real estate holdings, but said creating a Real Estate Investment Trust would not create as much value for shareholders as initially hoped. She didn\u2019t rule it out for future quarters however.<\/p>\n

Earlier this year, Sears Holdings sold 235 of its properties for $2.7 billion.<\/p>\n

Starboard Value has urged Macy\u2019s in July to spin off its real estate assets, which Starboard valued at about $21 billion.<\/p>\n

Photo at top: Macy’s hopes its winter quarter will bring some improvement in sales and profits. (Alex Valentine\/Medill)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Alex Valentine Shares of Macy\u2019s plummeted Wednesday after the company posted a 46 percent decline in quarterly earnings and lowered its profit outlook for the rest of the year. Shares fell 15 percent to $40.44, the lowest price for Macy\u2019s in over two years. The Cincinnati-based retailer\u2019s profit fell to $117 million, or 36 […]<\/p>\n","protected":false},"author":149,"featured_media":20235,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,509],"tags":[],"class_list":["post-20187","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-fall-2015"],"yoast_head":"\nMacy's stock plummets after profit and sales falter - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/macys-stock-plummets-after-profit-and-sales-falter\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Macy's stock plummets after profit and sales falter - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Alex Valentine Shares of Macy\u2019s plummeted Wednesday after the company posted a 46 percent decline in quarterly earnings and lowered its profit outlook for the rest of the year. 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