Macy’s Inc. plunged the most in more than 10 years after the department-store chain cut its annual profit and sales forecast, saying its sales momentum during the holidays weakened in mid-December.
Comparable sales will grow about 2%, down from a previous outlook of at least 2.3%, the company said in a statement Thursday. Profit will be as much as $4 a share. It had previously forecast as much as $4.30.
With today’s slide, the company erased its entire gain in 2018. Macy’s cited underperformance in categories such as women’s sportswear, fashion jewelry and cosmetics. It also said it had some issues fulfilling orders after a fire at its West Virginia distribution center.
“The holiday season began strong particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” Chief Executive Officer Jeff Gennette said.
Macy’s emerged from a lengthy slump last year by improving its e-commerce sales and bringing in new loyalty members. Investors may be concerned that the performance of recent quarters will prove unsustainable, however, as consumer preferences continue to shift rapidly.
The shares fell as much as 18% to $25.90, the biggest intraday decline since October 2008. Macy’s climbed 18% last year, compared with a 6.2% drop in the S&P 500 Index.
© 2019 Bloomberg L.P