People walk past a Macy’s store in a Manhattan shopping district on August 12, 2020 in New York City. Following a massive drop in tourism due to the Covid-19 pandemic and a work culture that increasingly keeps people at home, New York is experiencing a major exodus of chain stores and other retail stores. Many of these companies were struggling before the Covid outbreak due to the growing trend in online shopping, and the situation has only gotten worse since then. According to data from commercial real estate services company CBRE, average asking rents in 16 major Manhattan retail areas fell for the eleventh quarter in a row.
Spencer Platt | Getty Images
Macy’s Shares fell Thursday after the company saw more than 20% quarterly sales decline in the same store as consumers cut their clothing and accessories spend in American department stores during the Coronavirus pandemic.
The results, available a week before the major Black Friday and Cyber Monday shopping events, signal a rocky Christmas season for Macy’s. The retailer has closed unprofitable stores and has invested more in its off-price business to increase sales. But there is tougher competition from people like target and WalmartIncreasingly, as consumers expand their apparel and beauty offerings, they are moving their spending away from the mall.
Macy’s expects sales from owned and licensed stores to fall by a low to medium percentage this fall.
Macy’s shares fell roughly 3% in premarket trading.
Here’s how the retailer behaved in its third fiscal quarter ending October 31st, compared to analyst expectations based on refinitive data:
- Earnings per share: an adjusted loss of 19 cents compared to an expected loss of 79 cents
- Revenue: $ 3.99 billion versus $ 3.86 billion expected
Macy’s reported a net loss of $ 91 million, or 29 cents per share, compared to net income of $ 2 million, or a penny per share, last year. Without a one-time charge, Macy’s lost 19 cents per share, while analysts said it was 79 cents per share.
Net sales decreased from $ 5.17 billion a year ago to $ 3.99 billion. The latest quarterly results were above analysts’ estimates of $ 3.86 billion.
Revenue in the same business on a proprietary and licensed basis fell 20.2%, while analysts had called for a 23.3% decline.
Digital sales rose 27%, but those gains weren’t enough to make up for losses in stores.
CEO Jeff Gennette said even though customers bought more casual wear for the home during the pandemic, Macy’s home furnishings, jewelry and fragrances businesses saw double-digit year-over-year sales growth.
The pandemic has forced many retailers to cut costs in order to stay afloat. In June, Macy’s laid off 3,900 corporate employeesor around 3% of the total workforce.
At the close of trading on Wednesday, Macy shares were down roughly 47% that year, giving the company a market cap of $ 2.8 billion.