Macy’s chairman-CEO Terry Lundgren characterized the retailer’s Q3 as “tough,” after the retailer reported revenue growth below expectations and revised down its full-year earnings forecast. Q3 same-store sales declined 3.6%, the third straight quarter of falling sales. Analysts on average had expected 0.2% growth, according to research firm Consensus Metrix, CNBC reports.
Same-store sales could fall 1.8% to 2.2% in the year ending January, a revision down from the retailer’s earlier forecast for flat same-store sales.
The retailer said it wouldn’t pursue spinning off its properties into a real estate investment trust, but may use joint ventures or other deals to unlock some of the value in its portfolio of properties.
Shoppers can expect more promotions from Macy’s, according to Lundgren, though, to be fair, that is generally the expectation there at this point. As Columbia University business school retail professor Mark Cohen told Retail Dive earlier this year: “I cannot almost imagine buying something at full price at Macy’s anymore.”
The strong dollar is keeping foreign tourists away and warm weather is dampening sales of cold-weather clothes, according to the retailer’s report.
But in the bigger picture, Macy’s is also struggling with how to redefine the American department store for its Macy’s and Bloomingdale’s stores.
In fact, as they stand now, L Brands CEO Leslie H. Wexner last week declared department stores “dead.”
“They just haven’t been buried yet," Wexner said. "Is that format obsolete? No, I don’t think so. But it will require tremendous imagination and creativity for them to completely reinvent themselves.”
Although Nordstrom and Saks have had some better luck figuring that out, Macy’s is still struggling with its mid-market customer and can’t seem to get out from under its penchant for promotions.
That will continue for now, with the holidays upon us, according to Lundgren.
"Eventually you run out of days to sell through the inventory, because December 27th comes and volume just drops off precipitously," said Lundgren. "We're going to take markdowns. Consumers are going to have a field day, because we're going to have lots of values out there. But we're going to get rid of the inventory; have to do that before Christmas."