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Macy’s has slashed its annual profit outlook as the US department store chain said its sales fell in the lead-up to the key holiday shopping season.
The group also confirmed on Wednesday that a lone employee “falsified underlying documentation” to hide more than $150mn in delivery expenses as it concluded an investigation into an accounting lapse revealed last month.
Wednesday’s profit warning, which sent its shares sliding more than 10 per cent in pre-market trading, highlights how the group has faltered under rising competition from big-box stores such as Walmart and as ecommerce groups snag business from shopping centre-based department stores.
Macy’s said on Wednesday that it now expects fiscal 2024 adjusted earnings per share of $2.25 to $2.50, down from guidance in August of $2.34 to $2.69 as the New York-based group trimmed its forecast for gross margin, a measure of mark-up. It added that the full-year outlook included a $79mn “impact” related to delivery expenses in the accounting lapse.
The group also said that its net sales fell 2.4 per cent in the quarter to November 2 to $4.7bn, underscoring how the retailer was struggling in the lead-up to the winter holidays.
Macy’s latest earnings announcement comes days after activist investor Barington Capital Group called on the company to hive off real estate properties including its Manhattan flagship store.
