Macy’s beat Wall Street’s earnings expectations on Thursday, but cut its full-year guidance after discretionary sales weakened significantly in March.
Shares dropped as much as 10% in premarket trading.
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The department store operator, which includes its namesake brand, Bloomingdale’s and beauty chain Bluemercury, said it now expects sales of $22.8 billion to $23.2 billion for the year, down from a previous range of $23.7 billion to $24.2 billion. Macy’s anticipates comparable owned-plus-licensed sales will fall 6% to 7.5% during the period, worse than its previous outlook of a 2% to 4% decline.
For the year, it expects adjusted earnings per share of $2.70 to $3.20 — a major reduction from the previous $3.67 to $4.11 a share guidance.
The Macy’s company signage is seen at the Herald Square store on March 02, 2023 in New York City.
Michael M. Santiago | Getty Images
In a statement, CEO Jeff Gennette said “demand trends weakened” for discretionary items starting in March. He added that the guidance “reflects incremental clearance markdowns to address excess spring seasonal merchandise in the second quarter, along with adjustments to the category composition and inventory levels in the back half of the year.”
Here’s how Macy’s did for the three-month period that ended April 29 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: 56 cents adjusted vs. 45 cents expected
- Revenue: $4.98 billion vs. $5.04 billion expected
Net income for Macy’s was $155 million, or 56 cents per share, compared with $286 million, or 98 cents per share, a year earlier.
Revenue fell about 7% to $4.98 billion from $5.35 billion in the year-ago period. Sales missed analysts’ forecast.
Comparable sales on an owned-plus-licensed basis dropped 7.2% for the quarter, worse than the 4.7% drop expected by analysts surveyed by Refinitiv.
Shares of Macy’s closed Wednesday at $13.59, bringing the company’s market value to $3.69 billion. So far this year, the company’s stock is down 34%. That lags behind the nearly 9% gains of the S&P 500 and approximately 6% loss of the retail-focused XRT during the same period.
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