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Terry J. Lundgren, CEO of Macy's
Macy's kicked off department store earnings on a sour note Tuesday morning, missing both top and bottom line expectations.
Here's how the company did:
- EPS: $2.02 per share, adjusted, versus $1.96 per share, adjusted, expected by a Thomson Reuters consensus estimate
- Revenue: $8.52 billion, versus $8.62 billion expected by Thomson Reuters
- Comparable sales: Decline of 3.5 percent, excluding licensed departments, versus a decline of 2.5 percent, excluding licensed departments, expected by FactSet
Shares of the chain rose 4 percent in premarket trading.
Like its department store peers, Macy's has been struggling to attract shoppers who are increasingly spending their money online, at off-price stores, and on traveling and dining out. The company said last month that sales at its established stores fell 2.1 percent in November and December, which was at the low end of its previous guidance.
That decline was despite easy comparisons from the previous holiday period when unseasonably warm weather kept shoppers from splurging on winter apparel.
The company is taking a number of steps as it attempts to restore its profitability. In January, the company released a list of 68 stores that it plans to close. Macy's had previously announced that it would close roughly 100 stores, meaning more closures are expected.
The chain is meanwhile working to boost its value by selling off some of the flagship locations it owns. Macy's has been under pressure from activist investor Starboard to make money off its vast real estate empire.
Adding to uncertainties about the chain, reports surfaced earlier this month saying Hudson's Bay had approached Macy's regarding a takeover. Neither company has confirmed the validity of those reports.
Longtime Macy's CEO Terry Lundgren will step down during the first quarter but continue on as executive chairman. He will be succeeded by Jeff Gennette, who was named Macy's president in 2014.
This is a breaking news story. Please check back for updates.