Macy’s Inc. (NYSE: M) said it would close approximately 100 stores next year as the company faces more online competition and sales continue to decline.
“Whenever there’s been a setback in our company, we’ve been first in the industry to take a very aggressive stance at moving us forward,” CEO Terry Lundgren told CNBC’s “Squawk Box.” “That’s just part of it. By closing 100 stores… we’re getting out in front of this.”
The company said most of the 100 stores will be closed in early 2017. These 100 stores representing about 15 percent of its store base and about 4 percent of its annual revenue. The locations of the stores are not decided.
“We are encouraged by the fact that Macy’s sees this move as part of a wider program to reinvent itself and will direct the savings from shuttered stores into its remaining locations,” Neil Saunders, CEO of retail research firm Conlumino, wrote in a note Thursday.
The retailer Thursday also reported fiscal second-quarter sales and earnings that beat analysts’ estimates. Macy’s posted earnings of 54 cents per share, on revenue of $5.87 billion. Analysts had expected earnings of 45 cents a share on $5.75 billion in revenue, according to a consensus estimate from Thomson Reuters.
Shares jump more than 17 percent to $39.88 in the early trading. The stock has tumble over the past year. Despite the huge gain this morning, the stock is still down 42 percent in the past 12 months.