10 Jan Macy’s Cuts Guidance On Weak Holiday Sales
Macy’s slashed its outlook for profit, sales and gross margin, citing a weakening in sales in late-December. The company reported holiday-period same-store sales growth of 0.7 percent, compared with 1.0 percent growth in the same period a year ago.
“We delivered our second consecutive year of positive holiday comparable sales, driven largely by the traction of our strategic initiatives: Backstage, Vendor Direct, Store Pickup, Loyalty and Growth50. We experienced another period of double-digit growth in our digital business and continued strength in the Growth50 stores. The holiday season began strong – particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “In the holiday period, we saw strong performance across a number of categories (fine jewelry, women’s shoes, fragrance, dresses, outerwear, active and home). This sales growth was largely offset by: underperformance of other categories (women’s sportswear, seasonal sleepwear, fashion jewelry, fashion watches and cosmetics); temporary fulfillment challenges following the fire in our West Virginia distribution center; and underestimation of the impact of changes to our pre-Christmas earn & redeem promotional event.”
“We are revising the guidance we provided in November and will continue to take the necessary steps in January to ensure a clean inventory position as we enter fiscal 2019,” Gennette continued. “Looking back at 2018, we met our goal of returning the company to growth. Our revised guidance is above the expectations we set at the start of the fiscal year, and we expect to deliver our fifth consecutive quarter of positive comparable sales, including ‘comping the comp’ of the 2017 holiday season. The North Star Strategy is gaining traction, and the entire organization is engaged and motivated to continue improving our performance in 2019.”
2018 Annual Guidance
Macy’s, Inc. is revising sales and earnings guidance. The company is also providing additional detail on the company’s anticipated annual performance for fiscal 2018, noting that there are several weeks left in the quarter. As the company has not completed its quarter close, the data presented in this press release may change.