Macy’s Inc. (NYSE: M) share fell as much as 13 percent on Thursday after the department store operator reported revenue and earnings that miss analysts’ estimate, raising about the company’s turnaround plan. Macy’s said adjusted profit was 24 cents a share in the fiscal first quarter, missing analysts’ estimate of 35 cents per share, according to Thomson Reuters.
Total sales fell 7.5 percent to $5.34 billion in the quarter ended April 29, also fell short of analysts’ projection of $5.47 billion. Comparable sales, a metric closely watched by analysts, fell 4.6 last quarter, including sales in departments licensed to third parties. Analysts had projected a 3.5 percent year-over-year decline.
"We are encouraged by the performance of the pilot programs we tested last year in categories like women's shoes, fine jewelry, and furniture and mattresses," CEO Jeff Gennette said in a statement. "We look forward to expanding these successful initiatives nationally this year and anticipate they will have a measurable impact on our performance starting in the second quarter, building through the fall. Additionally, our digital platforms showed continued strong growth in the first quarter."
The largest department-store company has been struggling in the recent year due to huge competition from e-commerce players such as Amazon. New Chief Executive Officer Jeff Gennette began to run the company in March. He wants to help the company by cutting expense and investing in e-commerce and off-price brand.
Earlier this year, the company said it will close 100 underperforming stores and cutting about 4,000 jobs. The company expects to generate annual saving of $550 million.
Macy’s reiterated its forecast for 2017, expecting that comparable sales to decline 2 percent to 3 percent.
Macy’s shares fell 13.8 percent to $25.29 in the early trading. The stock was down nearly 30 percent this year.