Macy's same-store sales fell steeper-than-expected at 5.6 per cent in the first quarter while net sales declined 7.4 per cent. The retailer slashed its full-year forecast. The dismal forecast from the retailer pushed its shares down nearly 14 per cent to a more than four-year low.
Macy’s forecast cut reflects increased pessimism on the consumer's willingness to shop for apparel and accessories over the balance of the year. Apparel sales were also hurt by unseasonably cool weather in late March and early April, when retailers usually launch spring collections.
Macy's, profits have been shrinking for more than a year, and now it wants to intensify cost cutting and monetize unproductive real estate. About 40 per cent of Macy’s merchandise is exclusive, while the rest is available at competitors and at lower prices.
Macy's is working to boost sales by rolling out more of its backstage off-price stores and launching exclusive product ranges, including a clothing and accessories line in partnership with singers Elton John and Lady Gaga.
The intent is to bring the shopper into the store, have a product that's emotionally exciting to the consumer, a differentiated product that’s not available elsewhere.
Macy’s stock has lost 44 per cent of its value in the past 12 months.