Macy's issued another profit warning on Wednesday after a department store chain was forced to offer huge discounts to drive away goods, the latest sign of pressure in the US retail sector.
Shares fell 15.6 percent in pre-trading to 16.34% after the S&P 500, which operates about 680 stores and employs about 130,000 people, said it expects full-year earnings to be lower than previously expected. "We had a slow start to the quarter and ended below expectations," said Jeff Gennette, Macy's chairman and CEO in a statement.
The latest decline in Macy's revenue, which follows a profit warning after the Christmas shopping season, brings to the fore concerns about how the company is coping with the declining decline in e-commerce.
The results showed sales were up just 0.2 percent, roughly similar, to $ 5.55 billion in the 13 weeks to early August, setting the tone for earnings reports from other retail chains. JCPenney, Kohl & # 39; s and Nordstrom should also announce the results over the next week.
Mr Gennette blamed several factors for increasing the stock level at the company, which also runs Bloomingdale's. He said sales of summer clothing were slow, noted a decline in tourists visiting the United States, and also pointed to what he described as "fashion misses" in women's sportswear brands.
"We have taken evaluations to clear excess inventory in the spring and are entering the fall with the right inventory to meet expected customer demand," his statement added. "Many areas of the business are thriving," he said, noting "double-digit growth" in the digital business.
While the company kept its sales forecast for the year unchanged, it lowered forecasts for adjusted diluted earnings per share from the range of $ 3.05 to $ 3.25 to $ 2.85 to $ 3.05.
Shares in Macy's have come back from a sudden sell-off last year in the hope that executives will reinvent the business and move forward with their online offerings. But even before Wednesday's sell-off, they lost 35 percent so far this year, which ranked them among the 10 worst in the S&P 500 index, along with peer Nordstrom.
Poor results from Macy's have weighed in on counterparts in the presale. Nordstrom shares fell 4.9 percent, Kohl fell 5.8 percent and JCPenney slipped 4 percent.
Macy said the reduced guidance does not reflect the latest tranche of customs on goods from China. The company said it is evaluating White House announcements this week that it will delay them for more Chinese goods, in the event of a de-escalation of its trade war with Beijing.