Retail stocks are tanking in Thursday morning trading after a number of bellwether retailers including Macy’s reported disappointing earnings and seasonal sales numbers.
The storied department store chain saw shares drop more than 18 percent upon the release of results for the months of November and December, cutting its full-year guidance and recording positive yet weaker-than-expected holiday revenues.
“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,” chairman and CEO Jeff Gennette confirmed in a statement.
Despite solid performances across categories that included women’s shoes, dresses and activewear, overall growth at Macy’s was largely offset by a slump in women’s sportswear, fashion jewelry and cosmetics, among other divisions. Same-store sales were up just 1.1 percent for the last two months of 2018, with the company ultimately revising its annual profit outlook to a range of $3.95 to $4, from $4.10 to $4.30.
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“Looking back at 2018, we met our goal of returning the company to growth,” Gennette added. “Our revised guidance is above the expectations we set at the start of the fiscal year, and we expect to deliver our fifth consecutive quarter of positive comparable sales.”
After what investors hoped would be a strong season for retail, Macy’s mediocre results dragged down Wall Street, which yesterday saw its fourth straight day of gains. Following back-to-back trading sessions in the green, the Dow Jones Industrial Average shed more than 120 points (or 0.5 percent), while both the S&P 500 and the Nasdaq Composite declined 0.7 percent.
Kohl’s and Target were also among the retailers that delivered holiday figures. The former saw shares dip nearly 10 percent after noting a rise of just 1.2 percent in same-store sales for November and December, compared with 6.9 percent the same time in 2017. And despite reporting comps that improved 5.7 percent for the two months (versus 3.4 percent in 2017), Target wasn’t unscathed, as shares were down 4 percent.
Beyond retail, the stock market continues to fluctuate on concerns over rising interest rates, the ongoing trade war between the United States and China, an impending Brexit vote and the global economic slowdown.
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