Macy's Inc. shares plunge on disappointing holiday results

Marco Green
Января 13, 2019

Despite this, the Cincinnati-based retailer's comparable sales in November and December were up a combined 1.1 percent. Macy's shares dropped as much as 18 percent on Thursday.

Macy's stock posted its largest single-day percentage decline on record in trading Thursday after the struggling retailer warned of weak holiday sales and slashed its full-year forecast. (TGT.N) was down almost 4 percent even after the retailer posted relatively strong holiday sales growth of almost 6 percent.

All of the retailer's core categories grew during the holiday season, with toys, baby and seasonal gift items being the strongest.

Those results come as overall sales for the 2018 USA holiday shopping season hit a six-year high as shoppers were encouraged by early discounts, according to a Mastercard report in late December. Macy's also said it now sees its annual net revenue to be flat, rather than the 0.3% to 0.7% increase it previously estimated.

We delivered our second consecutive year of positive holiday comparable sales, driven largely by the traction of our strategic initiatives: Backstage, Vendor Direct, Store Pickup, Loyalty and Growth50.

Brian Cornell, Target's chairman and CEO, said, "We are very pleased with Target's holiday season performance, which came on top of really strong results in the same period past year".

Analysts say factors like a shift to online spending and consumer preferences for so-called experiences like spas and restaurants have hurt impulse spending that likely put a dent in December's figures for Macy's and Kohl's. In November, e-commerce and catalog sales jumped 10.8 percent from a year earlier, according to Commerce Department data, more than double the overall sales increase of 4.2 percent.

A recession could hit many department stores particularly hard, some industry watchers said. Department store sales slipped 0.2 percent during the same period. Its previous guidance issued in November called for EPS of $4.10 to $4.30.

Target, on the other hand, bucked the trend by posting strong online growth in November and December. It expects same-store sales growth of about 5 percent for the fourth quarter through January.

Target was a bright spot with comparable sales growth of 5.7 percent during November and December, up from growth of 3.4 percent in the same period a year ago, but its performance on Thursday was overshadowed by its rivals. Comparable online sales climbed 29 percent. Analysts were expecting earnings of $4.23 a share.

Macy's on Thursday lowered its fiscal 2018 earnings outlook to $3.95 to $4 per share from its prior per-share earnings for $4.10 to $4.30 per share.

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