Macy’s reported weaker-than-expected third quarter sales of $5.87 billion, disappointing some analysts who had predicted sales in the $6 billion range. A lack of international buyers and unusually warm weather in the northeast, which affected domestic consumers in buying key apparel, were among the causes, according to a statement by CEO Terry Lundgren.
Profit fell to $118 million, or 36 cents a share, and same-store sales suffered a 3.9% decline from last year. Fourth quarter same-store sales are also expected to decline, perhaps as much as 3%, although Lundgren reportedly said that the company would “focus on sales-driving activities in the holiday shopping season.”
The company also cut its guidance for the year, and is now forecasting earnings of $4.20 to $4.30 a share, as opposed to a previous forecast $4.70 to $4.80 a share in earnings. As a result, Macy’s stock lost about 9 percent of its value in after-hours trading on Tuesday, though Wednesday morning activity was basically flat.
Macy’s also said that it would not, at this time, proceed with the creation of a real-estate investment trust (REIT), which some investors believed would make better use of the company’s vast real estate holdings.