Macy’s Inc. (NYSE: M) Wednesday said it will cost more than 10,000 jobs and lower its earnings outlook after the company posted another disappointing holiday sales, pushing the stock down more than 10 percent.
The U.S. largest department-store company said comparable-store sales fell 2.1 percent in November and December, which was at the lower end of its projections. It maintained its full-year comparable sales guidance of a 2.5 percent to 3 percent decline. For the 2016, the company now expects diluted earnings to be in a range of $2.95 to $3.10 per share, down from its previous forecast of $3.15 to $3.40.
The company also announced to close 68 stores that are underperforming. The 68 store closings are part of the 100 closings it announced in August. On the announcement, the company released the locations of the closing store, including San Diego and Santa Barbara.
“We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape, as well as monetizing locations with highly valued real estate,” Macy’s outgoing Chairman and CEO Terry Lundgren said, in a press release. “These are never easy decisions, and we are committed to treating associates affected by these closings with respect and transparency.”
Macy’s also said it will cut more than 10,000 jobs to reduce costs. Under the plan, about 3,900 jobs will be eliminated with 63 store closing this spring. While about 6,200 other position will be cut to streamline operations and release capital. The company expects it will generate annual savings of $550 million in the beginning of 2017.
“We have been focused and disciplined about making strategic decisions to position us to gain market share and return to growth over time,” Lundgren said.
Macy’s shares fell as much as 14.40 percent to $30.66 in the early trading.