Macy‘s shares down sharply after earnings miss Wall Street target

Macy‘s Inc. shares plummeted 12.7% in Wednesday premarket trading after the department store retailer reported second-quarter earnings that missed expectations and lowered its guidance below the FactSet outlook. Net income totaled $86 million, or 28 cents per share, nearly halved from $166 million, or 53 cents per share. Sales totaled $5.55 billion, down slightly from $5.57 billion last year. The FactSet consensus was for EPS of 46 cents and sales of $5.55 billion. Same-store sales growth on an owned basis was 0.2%, and on an owned-plus-licensed basis, growth was 0.3%. FactSet was guiding for flat same-store sales. "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 Jeff Gennette, chief executive of Macy‘s, said in a statement. After clearing spring merchandise with markdowns, Gennette said the company has the "right inventory" for fall. Macy‘s now expects full-year adjusted EPS of $2.85 to $3.05, down from $3.05 to $3.25 on flat sales and same-store sales on both an owned and owned-plus-licensed basis that‘s flat to up 1%. The FactSet guidance is for EPS of $3.05. Macy‘s stock has taken a 35% tumble for the year to date while the S&P 500 index is up 16.7%.

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