Macy’s on Thursday reported its first same-store sales decline in two years, a drop of 3.5 percent, casting blame on warmer weather and weak traffic at some shopping malls.
Because of the poor results, the department store chain also slashed its full-year outlook.
CEO Jeff Gennette said the sales deceleration during the quarter was “steeper” than the company had anticipated, due, in part, to a warmer fall, weaker spending by international tourists, and “weaker than anticipated performance in lower-tier malls.”
He said the company also experienced brief issues on its website during the period, “in preparation for the fourth quarter.”
Macy’s said online sales growth slowed, as rivals were more competitive on pricing and stole some share.
Looking to the full year, Macy’s is now calling for same-store sales, on an owned plus licensed basis, to be down by 1 percent to 1.5 percent. Previously, it was expecting a range of flat to a 1 percent gain. It said it expects net sales to drop 2.5 percent to 2 percent. A prior outlook was calling for net sales to be about flat.
Despite these results, however, Genette is confident going into the holiday season. “The Macy’s, Bloomingdale’s, and Bluemercury teams are aligned and committed to delivering a great experience for our customers in our stores, on our digital sites and through our mobile apps,” he maintained. “We have fully updated our Growth150 stores and completed the 2019 expansion of Backstage. We have curated an expanded gift assortment with great values in all categories and developed a powerful marketing calendar for both our best and occasional customers. This holiday season, we also have even more flexible, secure and convenient fulfillment options for our customers including pick up in store and same day delivery.”