Macy’s has announced that profits have declined by almost 13% in the fourth fiscal quarter 2016. Sales have also declined for the 8th quarter in a row.
According to an article on MarketWatch, Macy’s has announced that profits at the company have declined by almost 13% in Q4. The company also said that revenue declined more than expected.
Sales at Macy’s declined by 2.1% in Q4. That’s compared to a 2.9% decline in sales last year. That’s also better than the 2.2% declined that analysts expected. Regardless, this is still the 8th quarter in a row in which sales have declined.
Earnings have, however, beat Wall Street estimates and the company’s shares increased by 3.1% to $33. They had declined by 25% in the past three months.
Sales are still declining at department stores as customers are instead shopping online rather than in stores.
Last month, Macy’s said it would cut more than 10,000 jobs and announced plans to close even more stores. During fiscal 2016, the company closed 66 stores with plans to close 33 stores over the next few years for a total of 100 stores. The brand still has about 700 stores open.
CEO Terry Lundgren released a statement saying, “while 2016 was not the year we expected, we made significant progress on key initiatives that are starting to bear fruit.” Lundgren continued to say, “we also took a big step forward in rightsizing our physical footprint and restructuring our entire organization.”
Lundgren will be resigning in March and will be replaced by President Jeff Gennett.
Macy’s expects sales to decline in 2017 by 3.2% – 4.3%. That’s better than the 4.4% decline analysts expect. Earnings are expected to be between $2.90 and $3.15 a share.
In Q4, Macy’s earned $475 million, or $1.54 a share. That’s compared to $544 million, or $1.73 a share, last year. Per share profits declined to $2.02 from $2.09. Sales declined by 4% to $8.52 billion.
Although the company expects sales to decline in 2017, it could make them increase if it worked more on selling products online. Brands like Coach, H&M, Zara, and more all know that people do a lot more shopping online and have been working to promote their brands online. If Macy’s did that, its sales would probably increase.
So, what do you think? Will Macy’s sales continue to decline? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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