LOGIN
Martha Stewart Collection has been a bright spot for Macy's.
Photo By WWD Staff
Launch Slideshow 1 image
Macy's Inc. has jumped onto the rising heap of industry projections of flattish holiday sales.
The nation's largest department store chain predicted Wednesday that its same-store sales in the fourth quarter could range between a fall of 2 percent and a rise of only 1 percent, totaling $8.7 billion to $8.9 billion. For the year, sales are projected to fall by between 0.3 percent to 1.3 percent, at $26.4 billion to $26.6 billion.
Wednesday's reading of the tea leaves pushed Macy's stock down 7.1 percent to $28.47 on the New York Stock Exchange and, along with the government's retail sales report, drove the overall S&P Retail Index down 2.5 percent to 424.84. Among individual retailers, Dillard's fell 2.9 percent to $19.03 and J.C. Penney dropped 2.7 percent to $46.73.
The market's fall Wednesday followed a rally Tuesday on the back of Wal-Mart coming in with strong profits growth in the third quarter even though it projected flat sales to a 2 percent gain for the holiday period. Meanwhile, companies from Polo Ralph Lauren to Coach have recently lowered their outlooks for the year, expressing caution because of the economy.
Earlier this month, the mood began sinking amid the government's disclosure that consumer spending slowed in October and retail analysts and trade organizations projecting soft holiday sales. Rising fuel costs and the weak housing market are hurting lower- and middle-income consumers the most, though there are signs higher income customers could hold back amid the vagaries of the financial markets and lower Wall Street bonuses as a result.
On Wednesday, Terry Lundgren, Macy's chairman, president and chief executive officer, put a positive spin on the outlook while expressing caution. "We have a wide range of new and distinctive merchandise in our assortment for the holiday season at both Macy's and Bloomingdale's, and we believe we will compete successfully in the fourth quarter despite what continues to be a challenging economic environment," he said in a statement.
But even with the cards stacked against it — merger aftershock, lack of compelling women's fashion and macroeconomic issues — Macy's managed to generate net earnings of $33 million in the third quarter ended Nov. 3, versus a $3 million loss a year ago. The chain came in on the high side of expectations, reporting earnings of 8 cents a diluted share for the period, compared with 3 cents last year.
The nation's largest department store chain predicted Wednesday that its same-store sales in the fourth quarter could range between a fall of 2 percent and a rise of only 1 percent, totaling $8.7 billion to $8.9 billion. For the year, sales are projected to fall by between 0.3 percent to 1.3 percent, at $26.4 billion to $26.6 billion.
Wednesday's reading of the tea leaves pushed Macy's stock down 7.1 percent to $28.47 on the New York Stock Exchange and, along with the government's retail sales report, drove the overall S&P Retail Index down 2.5 percent to 424.84. Among individual retailers, Dillard's fell 2.9 percent to $19.03 and J.C. Penney dropped 2.7 percent to $46.73.
The market's fall Wednesday followed a rally Tuesday on the back of Wal-Mart coming in with strong profits growth in the third quarter even though it projected flat sales to a 2 percent gain for the holiday period. Meanwhile, companies from Polo Ralph Lauren to Coach have recently lowered their outlooks for the year, expressing caution because of the economy.
Earlier this month, the mood began sinking amid the government's disclosure that consumer spending slowed in October and retail analysts and trade organizations projecting soft holiday sales. Rising fuel costs and the weak housing market are hurting lower- and middle-income consumers the most, though there are signs higher income customers could hold back amid the vagaries of the financial markets and lower Wall Street bonuses as a result.
On Wednesday, Terry Lundgren, Macy's chairman, president and chief executive officer, put a positive spin on the outlook while expressing caution. "We have a wide range of new and distinctive merchandise in our assortment for the holiday season at both Macy's and Bloomingdale's, and we believe we will compete successfully in the fourth quarter despite what continues to be a challenging economic environment," he said in a statement.
But even with the cards stacked against it — merger aftershock, lack of compelling women's fashion and macroeconomic issues — Macy's managed to generate net earnings of $33 million in the third quarter ended Nov. 3, versus a $3 million loss a year ago. The chain came in on the high side of expectations, reporting earnings of 8 cents a diluted share for the period, compared with 3 cents last year.
* Required