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Amazon.com, Inc. (AMZN) - free report >>
Macy's, Inc. (M) - free report >>
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Here's Why Macy's (M) Stock Fell Today
Shares of Macy's (M - Free Report) plummeted 7.45% on Tuesday afternoon after the struggling department store chain warned that its’ profit margins might keep falling.
The company’s chief financial officer Karen Hoguet voiced her concern that the company’s full-year gross margins could be 60 to 80 points lower year-over-year, and might also be down 100 basis points for the quarter. On top of that, Macy’s continues to drop its retail prices as it fights to reach its earnings forecast, which the company recently reaffirmed.
Macy’s stock currently hovers fractionally above its 52-week low of $22.04, which is also only slightly above its 5-year low. "I have tremendous faith in the power of the Macy's brand and brand's ability to strengthen its bond with customers," Macy's new CEO Jeff Gennette said. "We don't have all the answers, but we are working hard to figure it out."
Macy's shares have lost 35% of their value in the past year alone as e-commerce powers such as Amazon (AMZN - Free Report) continue to erode the department store giant’s customers and profits.
The company noted today that it is looking for new and innovative ways to use its existing stores to help bring in more cash after Macy’s posted same-store sales declines for the ninth straight quarter.
The failing department store is in the midst of closing roughly 100 stores, which is about 15% of the company’s brick-and-mortar locations. Last month, Gennette didn’t rule out the possibility of closing more stores.
On the back of the news out of Macy’s, Nordstrom (JWN - Free Report) slipped 3.53% and Kohl’s (KSS - Free Report) dropped 5.83% in early afternoon trading Tuesday.
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