Shares of department store chain Macy’s (NYSE:$M) tumbled today. Even though the company posted better-than-expected earnings this morning, guidance was not enough to offset all of the pessimism circulating the industry.
As of 11:32 a.m. EDT, Macy’s stock was down 9.3%.
So What Happened
Interestingly, Macy’s shares were up in pre-market trading as investors responded positively to the report – but not for long. The Ohio-based company reported that comparable sales were down 2.8% on an owned basis, and 2.5% including licensed departments. It’s worth noting that both were an improvement from Q1. Overall sales fell 5.4%, from $5.87 billion to $5.55 billion.
In terms of the bottom line, adjusted EPS fell from $0.54 to $0.48. However, this still surpassed expectations at $0.46.
According to CEO Jeff Gennette, performance in women’s shoes and jewelry was strong, and the off-price Backstage concept is showing considerable promise. Additionally, Gennette forecasts that the launch of a new loyalty program will help to improve the company’s sales trend in the second half of 2017.
Now What’s Going To Happen?
For the most part, it seems that the slide in Macy’s stock was due to the general malaise in the retail sector rather than the report itself. Additionally, the stock was pushed lower following a comment on the earnings call that management had no new real estate updates to report.
Macy’s echoed its 2017 guidance, calling for adjusted EPS of $2.90 to $3.15, which does not include real estate gains.
The takeaway? Even though this is a decent report when you take into consideration the expectations and the attitude surrounding the retail sector, it still shows just how hard it will be for department stores to regain faith from investors.
Featured Image: twitter
