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Macy's Stock Sinks as It Warns Underperforming Stores Will Hurt Results
Key Takeaways
Macy's ( M ) shares tumbled nearly 7% Monday morning when the biggest U.S. department store chain warned fourth-quarter results would be negatively impacted by underperforming locations .
The retailer said it anticipated Q4 sales to be at or slightly below the low end of its earlier estimate of $7.8 billion to $8.0 billion. It sees adjusted earnings per share (EPS) to be within its previous guidance range of $1.40 to $1.65.
Macy's is slashing the number of stores it operates as it struggles with lower sales and multiple proxy fights from activist investors . Last February, Macy's announced that 150 locations would be shuttered over three years, and just last week it released a list of the first 66 to be closed, including in Philadelphia Center City and Downtown Brooklyn.
Macy's expects comparable store sales to be about flat quarter-to-date, as its non-First 50 stores were "performing below expectations and generating negative comparable sales." It noted that included the locations Macy's plans to shut for lack of performance.
CEO Says on Track for 'Sequential Comparable Sales Improvement'
CEO Tony Spring explained that the company's "Bold New Chapter" strategy is "putting us on track to achieve our second quarter of sequential comparable sales improvement."
Shares of Macy's are down about 20% over the past year.
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