Macy’s Sees Sharp Downturn in Quarter
Macy’s Inc. had a tough third quarter. Citing unfavorable weather, weak international tourism and results at lower tier malls, the retailer reported a drop in third quarter net income to $2 million from $62 million in the year-ago period. Comparable sales were down 3.5 percent in the quarter ended Nov. 2, and total sales slipped to $5.2 billion from $5.4 billion. Earnings before interest, taxes, depreciation and amortization were $300 million versus $381 million. “After seven consecutive quarters of comparable sales growth, we experienced a deceleration in our third quarter sales. While we anticipated a negative comp as we were lapping a very strong third quarter last year, the sales deceleration was steeper than we expected,” said Jeff Gennette, chairman and chief executive officer of Macy’s Inc. “However, having cleared the excess inventory we faced earlier in the year, we were able to take a more balanced approach to sales and profit in the quarter, resulting in significantly improved margin compression versus the first half of the year. “Our third quarter sales were impacted by the late arrival of cold weather, continued soft international tourism and weaker than anticipated performance in lower tier malls,” Gennette added. “We also experienced a temporary impact on our e-commerce business
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