Macy's stock plunges after profit and sales outlook slashed
Shares of Macy's Inc. plunged 17% in premarket trade Thursday, after the department store chain slashed its outlook for profit, sales and gross margin, citing a weakening in sales in late-December. The company reported holiday-period same-store sales growth of 0.7%, compared with 1.0% growth in the same period a year ago. Macy's cut its fiscal 2018 same-store sales growth outlook to approximately 2.0% from 2.3% to 2.55; its net sales outlook to approximately flat from up 0.3% to up 0.7%; its gross margin rate guidance to "down slightly" from "up slightly"; its inventory position to "no change" from "down;" and its adjusted earnings-per-share projection to $3.95 to $4.00 from $4.10 to $4.30, compared with the FactSet consensus of $4.23. "The holiday season began strong - 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," said Chief Executive Jeff Gennette. He said underperformance in women's sportswear, seasonal sleepwear, fashion jewlery and watches and cosmetics offset strength in fine jewelry, women's shoes, fragrance, dresses, outerwear, active and home. The stock has lost 3.2% over the past three months through Wednesday, while the SPDR S&P Retail ETF has declined 6.1% and the Dow Jones Industrial Average has shed 6.7%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.