Department store giant Macy’s Inc NYSE: M reported disappointing results for the first quarter, with a larger-than-expected decline in sales and profit. News of the results sent Macy’s shares plunging at much as 13.36% on Thursday to $25.42.
Sales at established stores fell 4.6%, missing analyst expectations of a 3.5% decline. Merchandise inventories jumped 4.2% on the quarter, driving down profit 39% to $71 million.
Macy’s posted earnings per share of 24 cents in the first quarter, missing analyst expectations of 35 cents per share.
Macy’s Inc NYSE: M Revenue Down For 9 Consecutive Quarters
Revenue dipped 7.5% to $5.34 billion, falling for the ninth straight quarter and missing analyst estimates of $5.47 billion. Same-store sales were down by 5.2%.
Macy’s Inc NYSE: M and other department stores are facing sluggish sales as more consumers choose to do their shopping online instead of malls, where department stores are anchors. Macy’s has been closing stores in an attempt to regroup and improve sales.
The retailer still operates approximately 700 stores, but has been aggressive about closing locations that are underperforming.
Macy’s has maintained its earnings forecast of $2.90 to $3.15 per share, far from its level in 2015 but higher than its level in 2016.
Shares in Macy’s have been on the decline since the start of the year, falling 18% over the last five months. Over the last year, the department store’s stock has declined 21%.
Macy’s Inc NYSE: M is the latest department store to post disappointing results in an industry that’s on the decline. Rival Kohl’s Corporation (KSS) posted lower-than-expected sales, although the retailer surpassed earnings expectations.
Kohl’s has fared better than Macy’s due to its efforts to boost supply chain, use store stocks to fulfill online orders, and localize the merchandise sold in stores. Same-store sales fell by 2.7%,missing expectations of a 1.1% decline. Earnings per share came in at 39 cents, beating estimates of 29 cents.