Macy’s, the US retailer has come out with its Q4 earnings on Tuesday beating the analysts’ estimates on both the sales and earnings front, but faltered on the top line. This was perhaps due to the fact that getting consumers to stores get difficult in the holiday period. Moreover, the consumers now like to do shopping online as it is more comfortable and convenient. The consumer spending habits are also changing with people spending more on dining, travelling, and at off-price stores. The company has revealed last month that sales fell by nearly 2.1% at its established stores in the month of November and December, which was in line with their guidance but at the lower end.
They gave the EPS (earnings per share) of $2.02, while the consensus was of $1.96. However, the company gave the figure of $8.52 billion for the revenue, while the markets were expecting it to be $8.62 billion. The shares of the company opened in green, but later were trading flat.
Terry Lundgren, the CEO of the company said, “While 2016 was not the year we expected, we made significant progress on key initiatives that are starting to bear fruit.These include continued improvement in our digital platforms, the rollout of our new approach to fine jewellery and women’s shoes, an increase in exclusive merchandise and the refinement of our clearance and off-price strategy.”
The department store is in the process of many changes in its strategy to help him regain its good old days when its sales growth and profitability was at its peak. It is concentrating on expanding its businesses of Bluemercury and Backstage.
The company is also under pressure from Starboard, the activist investor on its real estate front. Thus, the company reiterated its plans to close more stores in coming years. The company had already released a list in January giving details of 68 stores that it plans to close.
Lundgren said on Tuesday, “I think [Starboard], like our other investors, they want to see our stock price go up. And so do we. We’re all aligned in this regard.” There were reports in the market in the start of this month that suggested a takeover bid between Hudson Bay and Macy. The CEO emphasised that they will do what they think is in the best interests of their shareholders.
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