Macy’s Inc., citing the impact of unseasonably warm weather and tourist declines, reported that comparable-store sales declined by 4.7 percent in November and December 2015, compared with the same period last year.
Macy’s also lowered its earnings forecast for the fourth quarter and all of 2015. For the year, Macy’s expects earnings in the range of $3.85 to $3.90 a share, excluding expenses related to cost efficiencies and asset impairment charges associated primarily with spring 2016 store closings. This compares with previous guidance of $4.20 to $4.30. Earnings guidance for 2015 includes an expected $250 million gain on the sale of real estate in downtown Brooklyn.
Fourth quarter earnings are seen at $2.18 to $2.23 per diluted share, excluding charges associated with cost efficiencies and store closings. This compares with previous guidance of $2.54 to $2.64 in the fourth quarter.
Macy’s noted the 4.7 percent decline including owned by licensed sales. On an owned basis, comparable sales declined by 5.2 percent in the combined November/December period.
“The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry,” said Terry J. Lundgren Macy’s chairman and chief executive officer. “In the November/December period, we were particularly disadvantaged by the historically warm weather in northern climate zones where both Macy’s and Bloomingdale’s are especially well-represented. About 80 percent of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods such as coats, sweaters, boots, hats, gloves and scarves. We also continued to feel the impact of lower spending by international tourists as the value of the dollar remained strong.
“That said, we are buoyed by a very strong performance in our digital business, with continued double-digit increases in online sales. In November/December, we filled nearly 17 million online orders at macys.com and bloomingdales.com – a new record for our company and an increase of about 25 percent over last year – based on significant new fulfillment capacity, site functionality and aggressive digital marketing. This validates the strength of our omnichannel strategy and related investments which we made over the past decade and will continue into the future,” Lundgren said.
The company said Macy’s Inc. is not expecting a major change in sales trend in January and expects a comparable sales decline on an owned plus licensed basis in the fourth quarter of 2015 to approximate the 4.7 percent decline in November/December (from previous guidance of down between 2 percent and 3 percent for the fourth quarter). This calculates to guidance for a decline in comparable sales on an owned plus licensed basis in the full-year 2015 of about 2.7 percent (from previous guidance of down 1.8 percent to 2.2 percent).
The decline in fourth quarter comparable sales on an owned basis is expected to be about 50 basis points greater than on an owned plus licensed basis.