The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
NEW YORK / AP
Macy’s wrapped up a weak fiscal year on an encouraging note, but the nation’s largest department store retailer still sees challenges ahead.
Macy’s, which also operates Bloomingdale’s stores, reported a 31 percent decline in fourth-quarter profits, dragged down by store closings and other costs. But the 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. A very warm winter early on plagued retailers during the most critical selling period of the year.
But the company says that it doesn’t expect to see a key revenue figure turn positive until the fourth quarter.
The retailer had been a stellar performer since the recession, but over the last year or so, it has stumbled, including through the crucial holiday shopping season. And weather wasn’t the only
factor.
Like many department stores, Macy’s faces increasing competition from onlineretailers like Amazon.com. It also has acknowledged that customers are spending more of their money on restaurants, spas and vacations, or sprucing up their homes, rather than buying clothes. And when they do spend money on clothing, they have increasingly walked through the doors of discount stores like T.J. Maxx.
The spending trends are playing out in retailers’ earnings. Last week, upscale department store chain Nordstrom Inc. reported fourth-quarter results that came short of analysts’ expectations, sending shares down in after-market trading. J.C. Penney Co. and Kohl’s Inc. are slated to report fourth-quarter results later this week.
But Home Depot Inc., the nation’s largest improvement chain, reported better-than-expected profit and revenue for the fourth quarter, as it benefits from an improving housing market. A key revenue metric jumped nearly 9 percent in the U.S.
Macy’s is making a lot of changes to reinvent the company. And investors are banking on improvement. Shares of Macy’s Inc. fell 36 percent over the past 12 months.