Macy’s Inc. issued a downbeat outlook for sales in the current quarter, a sign that executives might have been too optimistic about their expectations for a solid holiday shopping season.
Photographer: Bing Guan/Bloomberg
America’s largest department-store operator said it’s forecasting net sales in the current quarter to be at or slightly below the $7.8 billion to $8 billion executives were expecting as of last month. Analysts surveyed by Bloomberg are anticipating $7.8 billion.
Shares of Macy’s fell 5.8% in Monday trading in New York. The company’s shares fell 16% last year, compared with a 12% gain for the S&P Midcap 400 Index.
A number of consumer companies released earnings and provided updated guidance Monday morning ahead of the ICR conference taking place this week in Orlando, Florida. Macy’s was a laggard among the group, and illustrated how difficult it remains to break through in today’s retail environment where shoppers remain pinched by stubbornly high prices.
Abercrombie & Fitch Co. announced better-than-expected holiday sales, but its share price tumbled 16% in Monday trading in New York after its sales growth target fell short of some analysts’ expectations.
Abercrombie’s boost to its net sales growth target is “perhaps not as large as some had thought,” said Dylan Carden of William Blair. “The risk you hold from here is the 2025 guide,” expected in March, with the likely sales growth deceleration in the A&F brand posing a risk to margins, he said.
Other retailers saw bright spots. Lululemon raised its guidance and said it expects fourth-quarter sales to surpass market expectations. Shake Shack also reported fourth-quarter sales that surpassed Wall Street’s expectations. American Eagle Outfitters, Inc. said sales have been stronger than expected in the current quarter while while Urban Outfitters Inc. reported sales rose 10% in the two months ended December 31.
On Friday, Nordstrom Inc. boosted its forecast for annual comparable sales.
Cautious Shoppers
Macy’s maintained its outlook for earnings per share, according to a statement published Monday morning.
Macy’s executives said in December they were expecting a cautious but engaged shopper during the holiday season and raised their forecast for sales — an outlook that looks like it will ultimately prove too rosy. On Monday, the company said Macy’s comparable sales were roughly flat in the nine weeks ended Jan. 4 compared to the year before.
Since he took over nearly a year ago, Chief Executive Tony Spring has focused on closing down poorly-performing Macy’s stores and investing more resources in the 50 stores that he and his team think have greater potential. Those stores, as well as higher-end Bloomingdale’s and beauty chain Bluemercury, continued to report positive comparable sales in the quarter through Jan. 4, the company said in the statement.
Macy’s said it’s expanding that initiative to an additional 75 Macy’s locations, which Spring said in the statement reflects an “ongoing positive response” to the 50-store strategy. That includes hiring more staff and a focus on selling fewer-but-better items that are particularly popular with department-store shoppers, such as shoes and handbags, among other measures.
Accounting snafu
Macy’s is trying to move past an accounting snafu.
In December, Macy’s cut its profit outlook significantly as a result of an investigation into the financial impact of an employee who hid expenses over several years. The company said at the time that most of the impact of the hidden delivery expenses would be recorded in the fourth quarter. Executives have said that the ex-employee acted alone and didn’t hide the expenses for personal gain.
Executives will present Tuesday at 8am at the ICR conference. The company expects fourth-quarter results in early March.
Zalando has announced Iamisigo, a Nigerian-founded brand, as winner of its Visionary Award 2025 “for its boundary-pushing exploration of artisanal craftsmanship and pioneering textile innovation”.
As well as the €50,000 prize, the label will present its collection on the runway at Copenhagen Fashion Week SS26 in August “with Zalando’s continued support through financial assistance for the show production, facilitating mentorship opportunities and tailored industry connections”.
The company said the award reflects its “commitment to supporting emerging designers who challenge conventions and inspire progress in the fashion industry”.
The brand blends heritage textiles with traditional craft techniques drawn from across Africa. It was founded by Bubu Ogisi and offers “contemporary designs with a bold, fresh perspective”.
At an exhibition at Copenhagen Fashion Week AW25 this week, the award finalists introduced their brands, presented their visions and ethos through a showcase of their hero pieces and a panel talk, hosted by Zalando.
We’re told the jury chose Iamisigo “for its dedication to blending ethical sourcing with a commitment to empowering local communities. The brand’s distinct voice, visionary and magical aesthetic challenge conventions, offering a new perspective on what it means to drive positive change in fashion; transcending gender norms, designing for spirits and energies”.
The jury also said that Bubu Ogisi “embodies the essence of a visionary in many ways, and that she is a rare creative talent working in this space today, with a brand whose output is both beautiful and miraculous”.
Deckers Outdoor on Thursday beat third-quarter sales estimates on robust holiday demand for its Hoka running shoes, but an in-line annual forecast caused the footwear maker’s shares to tumble 17% in extended trading.
Ugg
Hoka shoes with their oversized soles have been gaining market share from brands such as Nike in the sportswear category. The brand, which retails for up to $300 in the United States, have also enjoyed full-price sales.
This drove up the company’s third-quarter revenue by 17% to $1.83 billion, beating analysts’ average estimate of $1.73 billion, according to data compiled by LSEG. Deckers also raised its annual net sales forecast for a second time this year.
“The guidance looks pretty conservative and considering the beat, it’s bit of a negative read into the out quarter,” said Drake MacFarlane, analyst at MScience.
The popularity of the Hoka shoes and the success of the company’s Ugg boots and sandals has helped it post double-digit revenue growth for nearly seven quarters.
The company now expects annual net sales to increase about 15% to $4.9 billion, compared with its prior expectation of about 12% growth to $4.8 billion. Analysts estimated an increase of 14.9% to $4.93 billion.
Deckers expects annual earnings per share of $5.75 to $5.80, compared with its prior forecast of $5.15 to $5.25.
Amazon.com is increasing its advertising on billionaire Elon Musk’s social media platform X, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Reuters
The major shift comes after the e-commerce giant withdrew much of its advertising from the platform more than a year ago due to concerns over hate speech.
In 2023, Apple also pulled all of its advertising from X and has recently been in discussions about testing ads on the platform, the report said.
Several ad agencies, tech and media companies had also suspended advertising on X following Musk’s endorsement of an antisemitic post that falsely accused members of the Jewish community of inciting hatred against white people.
Monthly U.S. ad revenue at social media platform X has declined by at least 55% year-over-year each month since Musk bought the company, formerly known as Twitter, in October 2022. He had acknowledged that an extended boycott by advertisers could bankrupt X.
Musk has become one of the most influential figures following President Donald Trump‘s re-election. He now leads the Department of Government Efficiency, which aims to cut $2 trillion in government spending.
Entertainment8 years ago