More bad news for Macy’s as the struggling retailer has announced a 13% drop in profits according to this Detroit News report.
Macy’s, the nation’s largest department store chain, says its earnings for the quarter that includes the holiday period dropped nearly 13 percent as results were dragged down by store closures and other costs.
The company has faced sluggish sales for the past two years as customers buy more online and less at the malls where Macy’s is often an anchor. It has been shuttering stores as it tries to regroup.
Macy’s has also been under pressure from shareholders to get more value out of its real estate holdings, valued by activist investor Starboard at nearly $21 billion. The chain has reportedly been in preliminary talks with Hudson’s Bay about a takeover or a real estate deal, though the company made no mention in its earnings report of any discussions. It did say it will be looking to further monetize its locations.
Macy’s earned $475 million, or $1.54 per share, in the three-month period ended Jan. 28. That compares with $544 million, or $1.73 per share, in the year-ago period. Adjusted earnings per share came to $2.02. Analysts had expected $1.95 per share for the quarter, according to FactSet.
Macy’s brand still has around 700 stores, though it has been more aggressive about closings while also scrambling to offer more exclusive merchandise and expand online. It’s also tried launching its own off-price stores called Macy’s Backstage, highlighting consumer tech like smart watches and testing an artificial intelligence tool that would free up sales assistants to provide higher levels of customer service.
Cincinnati-based Macy’s is the first major department store chain to report its fourth-quarter results. Last month, J.C. Penney and Kohl’s both announced poor holiday sales. Ailing Sears Holdings Corp., which operates Sears and Kmart, announced earlier this month that it expects sales at established stores to fall more than 10 percent for the quarter.