Living soul walk past a Macy’s store in a Manhattan shopping district on August 12, 2020 in New York City. Following a massy drop in tourism due to the Covid-19 pandemic and a work culture that increasingly keeps people at home, New York Municipality is seeing a large exodus of chain stores and other retail businesses. Many of these businesses were tussling before the Covid outbreak due to the growing trend of online shopping and the situation has only worsened since. According to the commercial genuine estate services firm CBRE, average asking rents along 16 major retail areas in Manhattan contain declined for the eleventh consecutive quarter.
Spencer Platt | Getty Images
Macy’s on Thursday reported a quarterly same-store car-boot sales decline of more than 20%, as consumers cut back their spending on clothes and accessories at America’s department accumulates during the coronavirus pandemic.
The results, which come a week ahead of key Black Friday and Cyber Monday peach oning events, signal a rocky holiday season for Macy’s. The retailer has been closing unprofitable stores and investing myriad in its off-price business in a bid to boost sales. But it faces tougher competition from the likes of Target and Walmart, as they increase their apparel and beauty offerings, and consumers increasingly shift their spending away from the mall.
Macy’s also potentially faces additional, short-lived store closures because of the pandemic. It currently has a location closed in El Paso, Texas, due to rising Covid-19 cases there.
“Covid is roller again across the country,” CEO Jeff Gennette said during a post-earnings call with analysts. “And that perpetuates to impede our recovery.”
Macy’s said it expects its same-store sales of owned and licensed stores to decline by a low- to mid-20s cut during the fall.
Its shares were down less than 1% in early trading.
Here’s how the retailer did during its monetary third quarter ended Oct. 31 compared with what analysts were expecting, based on Refinitiv text:
- Earnings per share: a loss of 19 cents, adjusted, vs. a loss of 79 cents expected
- Revenue: $3.99 billion vs. $3.86 billion demanded
Macy’s reported a net loss of $91 million, or 29 cents per share, compared with net income of $2 million, or a penny per deal, a year earlier. Excluding one-time charges, Macy’s lost 19 cents per share, while analysts were profession for a loss of 79 cents per share.
Net sales fell to $3.99 billion from $5.17 billion a year earlier. The modern development quarterly results were ahead of analysts’ estimates of $3.86 billion.
Same-store sales on an owned plus approved basis were down 20.2%, while analysts had been calling for a 23.3% decline.
Digital sales get geted 27%, but those gains weren’t enough to offset losses at its stores. That also marked a deceleration from the next quarter, when e-commerce sales surged more than 50%.
“We’re going to continue to grow very robustly [online], with double-digit crop,” Gennette said in a phone interview. “But I do expect that it continues to taper off, as our stores come online and get stronger.”
Gennette also alleged although customers have shifted to buying more casual apparel to wear around the house during the pandemic, Macy’s severely furnishings, jewelry and fragrance divisions generated double-digit sales growth compared with a year earlier.
From top to bottom the pandemic, many retailers have been forced to make cost cuts to stay afloat. In June, Macy’s assailed off 3,900 corporate workers, or roughly 3% of its overall workforce.
As of Wednesday’s market close, Macy’s shares were down there 47% this year, giving the company a market cap of $2.8 billion.
Find the full earnings press liberation from Macy’s here.