Investor Relations

Macy’s Sales Fall Less Than Expected

Is Macy's making a comeback?
Katie Kuehner-HebertFebruary 23, 2016
Macy’s Sales Fall Less Than Expected

Macy’s sales in its fiscal fourth quarter fell less than analysts had expected, due to a return to colder weather last month that prompted customers to buy more winter items.

The Cincinnati-based department store chain reported a 4.3% decline in sales at stores open at least a year in the fourth quarter ending January 30. That was slightly better than the 4.7% decrease that Macy’s had estimated, helped by improving sales due to colder weather in January. Net sales fell 5.3% to $8.87 billion, but beat analysts’ average estimate of $8.83 billion, according to Thomson Reuters I/B/E/S.

“While 2015 was challenging, our sales trend improved in January as the weather turned colder in northern climate zones and Macy’s and Bloomingdale’s were well-stocked in coats, boots, sweaters, gloves, hats, and other seasonal goods,” Macy’s chief executive Terry J. Lundgren said in a press release. “As the year ended, our inventories were in good shape — up by 0.7% on a comp basis.”

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However, Macy’s still faces plenty of challenges this fiscal year. Sales (excluding newly opened or closed stores) are projected to fall 1%.

Macy’s also said that the company, through its financial advisers, has begun the process of contacting potentially interested parties for partnerships or joint ventures involving the company’s flagship and mall-based properties.

“There has been a high degree of initial interest at this preliminary stage but it is premature to comment further at this point,” the company said.

Since last July activist investor Starboard Value has been pressuring Macy’s to spin off its highly-prized real estate assets, which it values at $21 billion, according to Reuters.

Macy’s net income in its fourth quarter fell to $543 million, or $1.73 per share, from $793 million, or $2.26 per share, a year earlier.