Macy’s Inc. stock tumbled Thursday when it warned investors that revenue growth would not meet projections it announced in mid-November.
Shares declined more than 18 percent to $25.95 in pre-market trading, as Macy’s joined Kohl’s and Target in warning investors about worse than expected results.
“Looking back at 2018, we met our goal of returning the company to growth,” Macy’s CEO Jeffrey Gennette said in a press release. “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.”
Also on the bright side, this is the first year since 2015 that Macy’s holiday results did not include new plans for store closures.
Macy’s said its comparable-store sales increased 0.7 percent in November and December, down from the 1 percent growth it achieved last Christmas. Gennette said the holiday season started strong, but weakened in mid-December. Women’s sportswear, fashion jewelry and cosmetics showed disappointing results and Macy’s had “fulfillment challenges” that included a fire in a West Virginia distribution center.
The end result is that Macy’s revised downward its revenue-growth expectations for the full year to 2 percent. It previously told investors to expect up to 2.5 percent growth in comparable store sales including revenue from licensing partners.
Macy's also reduced its profit guidance, telling investors to expect 2018 earnings per share to fall between $3.95 and $4.00, down from a range of $4.10 to $4.30 in mid-November.