Macy’s Inc (M) reported on Thursday a sharper drop in quarterly comparable sales than anticipated as a result of weak international tourism and sluggish mall traffic. The department store operator also revised down its full-year adjusted earnings forecast.
Macy’s shares closed lower for a third consecutive trading session in New York on Thursday. It has also been the steepest daily loss since November 19th. The stock went down 2.33% ($0.35) to $14.67, after touching an intraday low at $14.31, or a price level not seen since October 3rd ($14.11).
Shares of Macy’s Inc have retreated 50.74% so far in 2019 compared with a 23.80% gain for the benchmark index, S&P 500 (SPX).
In 2018, Macy’s stock went up 18.22%, thus, it outperformed the S&P 500, which registered a 6.24% loss.
Net sales went down 4.27% year-on-year to $5.173 billion during the third quarter ended on November 2nd.
Macy’s comparable sales dropped 3.9% year-on-year on an owned basis and 3.5% on an owned plus licensed basis during the third quarter. Analysts on average had expected a 1% drop in same-store sales.
“Our third quarter sales were impacted by the late arrival of cold weather, continued soft international tourism and weaker than anticipated performance in lower tier malls. We also experienced a temporary impact on our e-commerce business due in part to work on the site in preparation for the fourth quarter,” Jeff Gennette, Macy’s Chairman and Chief Executive Officer, said in a statement.
“We have confidence in our holiday strategies. The Macy’s, Bloomingdales and Bluemercury teams are aligned and committed to delivering a great experience for our customers in our stores, on our digital sites and through our mobile apps,” Gennette added.
The company now expects a drop between 1% and 1.5% in full-year total comparable sales. Previously, it had projected zero to 1% growth.
Meanwhile, adjusted net income attributable to shareholders went down to $21 million ($0.07 per share) during the latest quarter from $83 million ($0.27 per share) in the year-ago period.
The department store operator said it now expected full-year adjusted earnings within the range of $2.57 per share to $2.77 per share, or a revision down from a previously expected range of $2.85 per share to $3.05 per share.
Analyst stock price forecast and recommendation
According to CNN Money, the 13 analysts, offering 12-month forecasts regarding Macy’s Inc’s stock price, have a median target of $18.00, with a high estimate of $27.00 and a low estimate of $12.00. The median estimate represents a 22.70% upside compared to the closing price of $14.67 on November 21st.
The same media also reported that at least 8 out of 14 surveyed investment analysts had rated Macy’s Inc’s stock as “Hold”, while 2 – as “Buy”. On the other hand, 4 analysts had recommended selling the stock.
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