Macy’s sees drop in third-quarter sales

Shares of the operator of Macy’s and Bloomingdale’s stores fell more than 9 percent in premarket trading on Wednesday.

Macy’s management no expects earnings for the full year to be between $4.20 and $4.30 per share, excluding items.

Other retailers also fell, including JC Penney which dropped 2 percent to US$8.51 despite reporting a 6.4 percent rise in same-store sales.

Tepid spending by domestic shoppers and slowing tourism, Lundren said, are at least partly to blame for declines in revenues, profit and comparable store sales in Q3. “Simultaneously, the slowdown in buying by global visitors continued to significantly impact Macy’s and Bloomingdale’s stores in tourist centers, which are a few of our company’s largest-volume and most profitable locations”, said Terry Lundgren, chairman and chief executive officer of Macy’s, Inc. Finally, Atlantic Securities cut shares of Macy’s from a “neutral” rating to an “underweight” rating and set a $64.00 price objective for the company.in a research report on Friday, July 24th.

Macy’s (NYSE:M) traded down 13.19% during trading on Wednesday, reaching $40.82.

Profit fell to $118 million, or 36 cents a share, from $217 million, or 61 cents a share, a year earlier. “We use these times to reset our ambitions and determine how we’re going to win and where we’re going to play while maintaining a financial objective that we set for our shareholders…” The company had revenue of $5874.00 million for the quarter, compared to analysts expectations of $6098.28 million.

Warm weather, a strong dollar and the shifting habits of American shoppers have all weighed on sales for retailers, including Macy’s, and investors are growing increasingly concerned about the effect that that will have during the most critical shopping period of the year. For the coming holiday season, Macy’s expects its same-store sales, on an owned and licensed basis, to decline 2% to 3%.

Macy’s also said it will not pursue a spin-off of its real-estate assets, but noted that it may consider the option again down the road. Conversely, analysts had anticipated EPS at $4.22 on a fall of 1.19% in revenue. Shares of AB InBev rose $2.18, or 2.8 percent, to $121.63. The higher price target estimate is at $100 and the lower price target estimate is expected at $46 according to 14 Analyst.

Macy’s plans to close up to 40 stores in early 2016 and is exploring the possibility of joint ventures to redevelop its four flagship stores, including Chicago’s State Street location. Luxottica already has about 670 Sunglass Hut stores at Macy’s. Analysts on average had expected 0.2% growth, according to research firm Consensus Metrix, CNBC reports.

Given the soft top-line performance, Macy’s lowered its sales outlook for fiscal 2015.