From staff and wire reports
NEW YORK: Macy’s reported a 31 percent decline in fourth-quarter profits Tuesday, dragged down by store closings and other costs.
Among the stores closing is the Chapel Hill Mall location in Akron. A representative said a storewide clearance sale is in progress and operations there are expected to cease around March 25.
A very warm winter early on plagued retailers during the most critical selling period of the year. Still, Macy’s adjusted results beat Wall Street estimates and sales picked up in the final weeks of the holiday quarter as winter finally arrived, driving sales of coats and boots higher.
It’s an encouraging sign for the retailer, which had to slash prices toward the end of the year as inventories piled up. Macy’s, which also operates upscale Bloomingdale’s, had been a stellar performer since the recession, but it stumbled through the holiday season, and it wasn’t only the weather.
Like many department stores, Macy’s faces increasing competition from online retailers like Amazon.com as well as discount stores like T.J. Maxx.
Shares of Macy’s Inc. fell 36 percent over the past 12 months, but have begun to climb back this year.
“I have reminded my team that our setback last year is a setup for our comeback,” said Chairman and CEO Terry Lundgren in a prepared statement Tuesday.
Lundgren has closed 40 stores and trimmed staff in corporate offices and in stores to become more nimble.
The closure of the Chapel Hill store — one of the mall’s anchors — comes amid a retail exodus from the Northeast Akron shopping center that includes Old Navy, Express and Aeropostale apparel sellers.
Another of the mall’s anchor department stores, J.C. Penney, reports quarterly earnings Thursday following store closings that have so far spared Chapel Hill.
Macy’s has strived to expand online and has pursued other avenues of growth. It acquired Bluemercury, the upscale beauty products and spa company. Last year, it opened Macy’s Backstage to go head to head with discounter T.J. Maxx on its home turf.
The maneuvers did cost the company in the fourth quarter, but investors appear to think it was worth it. Shares rose $2.25 to $43.31 before the opening bell.
Macy’s earned $544 million, or $1.73 per share, in the quarter ended Jan. 30. That compares with $793, or $2.26 per share, in the year-ago period.
Adjusted profits were $2.09 per share, better than the $1.86 per share estimate from analysts, according to Zacks Investment Research,
Total revenue fell 5.2 percent to $8.87 billion, but that’s still higher than the $8.84 billion projection from analysts.
While comparable-store sales declined to 4.3 percent, given the terrible holiday season it was better than Wall Street had expected.