Macy's (M, $20.42) stock slumps, on warning about sales to come in at lower end of forecast range
Macy's shares plunged on Monday, after the retail company warned that its fourth quarter sales are likely to come in at the lower end of prior forecasts. The company also mentioned that consumer spending is like to face headwinds into the first half of the year.
In an investor update, Macy's CEO Jeff Gennette said weakness in non-peak holidays sales were "deeper than anticipated", even as Black Friday and Christmas week activity were either in-line with or above projections.
Macy's said that it is now expecting fourth quarter earnings hitting its prior guidance of $1.47 to $1.67 per share, and sales to come in at the lower end of its $$8,161 million to $8,401 million forecast range. However, its occasion apparel and gift-giving business segments emerged as areas of strength, and inventory composition and price points were in line with customers' needs (as indicated by Gennette.
“Based on current macro-economic indicators and our proprietary credit card data, we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly," Gennette added.
