Macy's stock slumped Tuesday (June 6) in the wake of a warning at the company’s annual investor day that profit margins are being squeezed.
Macy's shares slipped more than 7 percent intraday, before ending the session at $21.90. That was the worst Macy's stock showing since last month, when the firm released its latest quarterly results, notching a worse-than-expected 4.5 percent same-store sales decline for the fourth quarter of 2016. This year, noted Bloomberg, Macy's stock is down more than 30 percent from recent peaks.
The latest Macy's profit margin news came when Macy’s Chief Financial Officer Karen Hoguet said the firm’s second-quarter gross margins have been compressed by 1 percent as measured year over year. The margin pressure comes despite cost cutting, but the company also maintained its earnings projections for the year. Amid continued Macy’s initiatives under recently installed CEO Jeff Gennette, the company is focusing on eCommerce and discount business lines (the latter under the name Backstage), and the firm is also closing stores, with 68 Macy's retail department stores slated for closure this year.
Real estate, noted Bloomberg, also may offer some value for the company. Macy's, said the newswire, “is looking to squeeze money from its properties,” which feature an iconic store in Manhattan. Macy’s enlisted Brookfield Asset Management at the end of last year to help formulate plans for 50 Macy’s brick-and-mortar real estate holdings.
