Earnings up for Macy’s as cost cuts continue
Third-quarter report stressed challenge of holiday season as chain deals with online retail
NEW YORK— Macy’s Inc. reported that its third-quarter earnings more than doubled as it continues to cut costs. But the department store chain reported weaker-than-expected sales as it continues to have a hard time pulling shoppers through its doors.
The report, released Thursday, underscores just how challenging the holiday shopping season will be.
Like all department stores, Macy’s has wrestled with weak sales as customers go online and also increasingly spend on things other than clothing.
It’s facing stiff competition in the clothing world as online leader Amazon expands further into fashion.
To turn its business around, Macy’s has cut jobs and closed some locations.
It’s been expanding into off-price stores and launched a loyalty pro- gram last month that it hopes will bring more shoppers to its stores. Still, it hasn’t been able to reverse a slide in sales.
The company reported that revenue at stores opened at least a year was down 4 per cent for the third quarter, worse than the 2.9-per-cent drop that analysts expected. The decline marked the 11th straight drop for the key measure.
Macy’s is increasing the number of temporary workers it’s hiring for distribution and warehouses for the holiday season as it chases fastgrowing e-commerce sales. But its overall holiday hiring will fall nearly 4 per cent.
Macy’s said that its fiscal thirdquarter net income was $36 million (U.S.), or12 cents per share. Earnings, adjusted for one-time gains and costs, were 23 cents per share.
The results topped Wall Street expectations, but the bar was set low. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 19 cents per share.