Macy's cut its earnings guidance and shares are tumbling
The retailer now sees adjusted earnings per share (EPS) in a range of $3.15 to $3.40, lower than the previous guidance for $3.80 to $3.90, and less than the estimate for $3.81.
Macy's shares fell by as much as 7% in pre-market trading.
Its expectations for profits are now lower because retail is a really hard business right now, and people aren't shopping in malls like they used to.
Here's what CEO Terry Lundgren said in the earnings statement (emphasis ours):
We are seeing continued weakness in consumer spending levels for apparel and related categories. In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook. Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy's and Bloomingdale's are key destinations, as well as a slowdown in some center core categories - further intensifying the challenges associated with growing topline sales revenue.
Macy's reported adjusted EPS of $0.40 for the first quarter, beating the forecast for $0.36. Its net sales fell for a fifth straight quarter and totaled $5.8 billion, lower than analysts' forecast on Bloomberg for $5.93 billion.
Comparable-store sales - at locations open for at least one year -fell 6.1% an owned basis, more than the forecast for a 3.1% drop.
Macy's said it is looking into proposals from potential partners that want to enter joint ventures involving its mall stores and other flagship locations. Meanwhile, it will continue to look for ways to generate revenues from "unproductive real estate," the company said.
More to come...