Macy’s Inc (MSLI) closed at $31.38 on Wednesday after taking a 15.18% dip in just a day. This is the lowest their stocks have closed in over 5 years. They closed at $36.97 on Tuesday and saw an overnight dip of 8%. After opening at $33.86 on Wednesday, they further dipped over 7% during the trading hours. The stock has dropped 44% over the past 12 months through Tuesday’s close.
Macy’s Inc. has had a sales slump in the first quarter which has affected their stock price. They said its sales slump accelerated in the first quarter, dragging down earnings and prompting the retailer to cut its forecast for the year.
Macy’s had a 116 million dollar profit or 37 cents per share, a decrease when compared to the 193 million dollar profits or the 56 cents per share in the homolog period. When it comes down to the revenues, was registered a break of 7.4% to the 5.77 billion dollars, under the analyst’s predictions that, according to Reuters, situated in the 5.93 billion dollars.
Macy’s has been struggling with declining sales, hurt by dwindling store traffic, competition from discount retailers and cautious consumer spending. The company said earlier this year that challenges would persist during the first quarter, but the sales decline was much steeper than analysts expected.
Republican Donald Trump took credit for Macy’s year-to-date decline on Monday . He said, “Wow! Macy’s “shares are down more than 40% this year, I never knew my ties & shirts not being sold there would have such a big impact!” Trump feuded with the department store chain after he launched his campaign earlier in the year.
Macy’s was one of several companies to cut ties with Trump’s business empire amid controversy over his caustic statements about illegal immigration. Macy’s said it would phase out its Trump-branded dress shirts, ties, and a fragrance called “Success.”
The string of poor results has prompted Macy’s to rethink the role of traditional department stores as consumers spend more on goods like health and wellness products, food and travel, that department stores don’t carry.
Under pressure from activist investor Starboard Value LP to spin off its real-estate holdings, Macy’s has signaled it is open to such transactions. In March, it named an expert in real-estate investment trusts to its board and said a month earlier it had received a high level of interest from parties it had contacted about creating partnerships or joint ventures for its flagship and mall-based stores. The company said it is evaluating proposals from potential partners for joint ventures or similar arrangements involving Macy’s flagship locations and the company’s mall-based store portfolio.
Must read: Amazon Closes at Its All Time High
Macy’s discussed its future plans to invest more in enhanced online customer support and increased digital and mobile shopping functionality. And it’s doing that while it continues to shut down some under performing brick and mortar stores. Whatever they do, they need to act quickly because their stocks are falling very fast and this has led many investors to plan about pulling out.