Macy's shares plunge as weak holiday sales prompt forecast cut
(Reuters) - Shares of Macy’s Inc (M.N) plunged 17 percent in early trading on Thursday, after the department store operator cut same-store sales forecast for the full year due to weak demand during mid-December.
Sales from Macy’s stores and third-party licensees open for more than 12 months is now expected to grow about 2 percent, lower than a prior forecast of between 2.3 percent and 2.5 percent.
“The holiday season began strong â€“ 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,” Chief Executive Officer Jeff Gennette said in a statement.
Macy’s said that the overall sales growth was largely offset due to underperformance in certain categories such as women’s sportswear, fashion jewelry and cosmetics as well as challenges in fulfilling online orders after a fire in its distribution center.
The Cincinnati-based company also cuts its forecast for sales and profit for the year, after it had raised its annual earnings outlook in anticipation of a strong holiday shopping season in November.
(This story corrects paragraph 1 to say forecast cut was for the “full year”, not the “holiday quarter”)
Reporting by Aishwarya Venugopal in Bengaluru