Macy's CFO reveals 4 reasons the company blew it last quarter

Macy's sales and traffic are slowing ahead of the all-important holiday shopping season.

The department store chain cut its annual profit forecast on Wednesday after posting a quarterly sales decline of 5.2%, with same-store sales falling 3.9%.

Macy's shares dropped 14% on Wednesday, which was the biggest one-day decline in seven years.

"We had a very tough quarter, and we are clearly disappointed," Macy's CEO Terry Lundgren said on an earnings call.

The company's chief financial officer, Karen Hoguet, blamed Macy's performance on four problems.

1. Hoguet said there has been weak interest in the company's fall apparel due to the warm weather over the last several months.

"The weather has not helped with the warm temperatures experienced across the country," she said. "Our sales of cold weather merchandise, such as coats, sweaters, boots, etcetera were significantly below last year in the quarter."

2. Tourists aren't spending as much. Tourist spending has a huge impact on Macy's because international stores are their most profitable locations, Hoguet said.

3. Growth at Macy's name-sake stores is slowing. Hoguet said this is due in part to the decline in tourist spending.

4. Demand for some of Macy's biggest brands is weakening.

The company is planning to offer deep discounts to help spur spending.

"That will be good for consumers, but it will obviously put pressure on our own margins," Lundgren said.

Macy's expects sales to decline between 2% and 3% in the fourth quarter, which includes the holiday shopping season.

"I wish I could say it's going to get ice cold across the country, I wish I could say that tourists are going to begin to show up and start spending, but you can see in our forecast for fourth quarter, we're not expecting that," Lundgren said.

Macy's is also suffering from an outdated fleet of stores, according to Neil Saunders, the CEO of Conlumino, a retail consulting firm.

"The wider truth is that Macy's remains a business that is somewhat out of kilter with what modern consumers want. Ranges, store locations, and its general store environment are simply not optimized to deliver; and in an era when consumer spending remains constrained, Macy's is increasingly losing out," he wrote in a note to clients.