Macy’s, the largest chain of department stores in the country, said its earnings during the just completed quarter, which included the holiday shopping period, fell by close to 13% as its results were pulled down by store closures, lower sales and other types of costs.
The profit beat expectations at Wall Street, but the department store chain said it would have another year of declines in sales for an important revenue measure.
The just ended quarter is the eighth consecutive quarter that sales have declined for the metric. Like many chains of department stores, Macy’s faced less than stellar sales as consumers purchased more through the Internet and less at shopping malls where Macy’s is often one of the anchors.
The department store chain has been closing stores while attempting to regain traction. Macy’s has come under pressure from its shareholders as well to gain more value from its holdings in real estate, which Starboard, an activist investor said are worth close to $21 billion.
The chain reportedly has been holding early talks with Hudson’s Bay over a deal for real estate or takeover. On Tuesday, Macy’s did not mention the topic saying it does not make comments related to rumors.
Macy’s did say the company was looking into further monetizing locations. The chain has been shuttering its locations, selling some and those moves help deliver $673 million in asset sales over the last year.
For the quarter that ended January 28, Macy’s earned over $475 million equal to $1.54 a share. That is in comparison to earnings of $544 million equal to $1.73 a share for the same period one year ago.
Adjusted per share earnings were $2.02. Analysts were expecting them to be $1.95 for the just ended quarter. Revenue was down 4% to end the quarter at $8.52 billion, while Wall Street was expecting $8.6 billion.
CEO Terry Lundgren at Macy’s said that while last year was not what they had expected, significant progress was made on important initiatives that are beginning to payoff.
Those initiatives included new approaches to the merchandising of its women’s shoes and fine jewelry, increasing the quantity of exclusive products and testing a strategy of off-price that looks to compete with rivals such as TJ Maxx.
The CEO, who steps down on March 23 and will be succeeded by Jeff Gennette the current President, has been credited with close to doubling sales while holding the reins of the company.
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