Macy’s ( M) slashed its profit guidance after Q2 earnings badly missed forecasts amid deep discounting. Macy’s stock plummeted early Wednesday.
Estimates: Analysts see Macy’s earnings falling 22% to 46 cents per share. But revenue is expected to rise 1% to $5.63 billion. Consensus Metrix analysts see same-store sales rising 0.1%, with comps including licensed departments seen up 0.3%.
Results: EPS of 28 cents on revenue of $5.55 billion. Same-store sales grew 0.2% on an owned basis and 0.3% on an owned plus licensed basis.
Outlook: Management cut its 2019 EPS guidance to $2.85-$3.05 from an earlier view of $3.05-$3.25 but still sees flat revenue, with comp sales flat to up 1%. Analysts currently see EPS of $3.11 with revenue up 0.5%.
“Rising inventory levels became a challenge based on a combination of factors: a fashion miss in our key women’s sportswear private brands, slow sell-through of warm weather apparel and the accelerated decline in international tourism,” said Chairman and CEO Jeff Gennette. “We took markdowns to clear the excess Spring inventory and are entering the Fall season with the right inventory to meet anticipated customer demand.”
Stock: Shares sank 12% to 17.00 in premarket trading on the stock market today. Nordstrom ( JWN), which reports Aug. 21, fell 5% early Wednesday. Kohl’s ( KSS), which reports Aug. 20, fell 5%.
Macy’s stock has fallen since the firm missed on revenue in Q1. The potential impact of additional China tariffs has also weighed on Macy’s stock. But the Trump administration announced Tuesday that new 10% tariffs on $300 billion in some Chinese imports would be delayed to mid-December.
The company had warned in May that the additional China tariffs would affect a lot of apparel and accessories categories among private labels and national brands.
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Source:: Daily Times