Sluggish sales amid weaker consumer spending dragged down Macy’s earnings for the first quarter.

The retailer reported Wednesday that sales at stores open for at least a year fell 6.1%. It was the fifth consecutive quarter the metric has declined and Macy’s worst quarterly performance since 2009.

Analysts polled by FactSet had predicted a 3.5% decline.

“We are seeing continued weakness in consumer spending levels for apparel and related categories,” Macy’s CEO Terry J. Lundgren said in a news release. “In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook.”

Macy’s net income fell 40%, to $116 million, or 37 cents a share. Excluding non-cash settlement charges of $13 million related to the company’s retirement plans, per-share earnings were 40 cents.

Revenue fell 7.4% to $5.77 billion. Analysts had projected 36 cents in adjusted earnings per share and $5.93 billion in revenue, according to Thomson Reuters.

In trading Wednesday, Macy’s stock fell nearly 15%, closing at $31.49.

The company has been shuttering stores and expanding its new Backstage line of off-price stores but as The Wall Street Journal reports, “the moves haven’t been enough to offset weak demand and pricing for the apparel and other items at the core of its stores.”

“Clearly, our industry is in something of a rough patch,” CFO Karen Hoguet said. “We know we are not alone.”

The WSJ noted that discount chains like T.J. Maxx and fast-fashion retailers such as H&M Hennes & Mauritz AB are selling jeans as cheap as $17 and polo shirts for $10, “stealing foot traffic and hurting demand for the $50 jeans and $80 polo shirts that Macy’s sells.”

Macy’s also lowered its guidance for the year, projecting $3.15 to $3.40 in adjusted earnings per share and a same-store sales decline of roughly 4%. Earlier, the company had forecast $3.80 to $3.90 in per-share profit.

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One response to “Macy’s Earnings Drop 40% on Sluggish Sales”

  1. What millenials – and everyone else – want, is to know what something costs. “33% off the marked price [if you can find a price tag], plus an additional 15% off today only, with an additional 20% off if you have the coupon from our mailer, and an additional 10% off if you apply for our credit card. Now with double points!” is not a reasonable pricing strategy. Toss in some knowledgeable sales staff, some manned cash registers, clean up the bargain-basement vibe in what is supposed to be a higher-end store (stop over-stuffing racks, pick up what falls on the floor, and FGS toss in a few mirrors and some decent lighting on the sales floor) and you might have something there.

    If I have to bring an accountant and some hunting dogs with me (to find a cashier, oh, sorry – “sales assistant”) every time I shop at Macy’s, I’ll just go elsewhere.

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