CINCINNATI - Macy’s Inc. posted its ninth straight quarter of declining revenue Thursday, falling short of analyst expectations on revenue and profits.
The Cincinnati-based department store chain recorded $70 million in net income, or 24 cents per share, on net sales of $5.3 billion. That’s 10 cents per share less than analysts had forecast for Macy’s, and $130 million shy of revenue expectations.
Macy’s shares were down more than 13 percent to $25.27 in mid-morning trades.
Macy’s CEO Jeffrey Gennette said the performance was “consistent with our expectations, and we remain on track to meet our 2017 guidance.”
This is Gennette’s first quarterly earnings report at the helm; he replaced longtime CEO Terry Lundgren in March.
“We are encouraged by the performance of the pilot programs we tested last year in categories like women’s shoes, fine jewelry, and furniture and mattresses,” Gennette said in a press release. “We look forward to expanding these successful initiatives nationally this year and anticipate they will have a measurable impact on our performance starting in the second quarter.”
In a conference call with Wall Street analysts, Gennette said he doesn't have all the answers yet. But his goal is to stabilize Macy’s brick-and-mortar stores by making them easier to shop and featuring unique merchandise and services.
“What's working is where we have exclusivity,” he said. “Our customers love that. Simple is working. When we simplify and build and promote great products that customers can only get at Macy's that our customers easily see on the floor, we get the sale.”
Macy’s has been increasingly vulnerable to shareholder activists and takeover speculation, as it closes stores and struggles to compete against lower-priced rivals, online retailers and smaller, boutique chains. It has responded with a series of initiatives, including its discount concept, Backstage, and Bluemercury, a cosmetics retailer that Macy’s acquired in 2015.
Other department store chains are having similar problems: Kohl’s Corp. reported its fifth straight quarterly sales decline Thursday. It posted better-than-expected profits and its 3.2 percent decline in revenue was better than’s Macy’s 7.5 percent dip. Kohl's shares were down 6 percent to $37.80 per share by mid-morning.