Macy’s Q1 results are in and they’re not great. The department store posted revenue of $5.34 billion in the period, which missed Street forecasts. Four analysts surveyed by Zacks expected $5.47 billion.
Reporting a first-quarter profit of $71 million, Macy’s also reported a profit of 23 cents per share. Earnings, adjusted to extinguish debt, were 24 cents per share. The results missed Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 35 cents per share.
No turnaround is imminent, either. Management projects comparable store sales to decline between 2.2% and 3.3% in 2017. Shares fell by over 10% following the news.
Like many department stores, Macy’s is struggling in the face of discounters and a changing customer.
“In 2017, we are focused on taking actions to stabilize our brick and mortar business, including the testing and iteration of additional pilot programs in order to bring them to scale in future years,” CEO Jeff Gennette said. “At the same time, we will invest to aggressively grow our digital and mobile business, while continuing the integration of our online and offline experience to allow our customers to shop the way they live.”
KOHL’S MISSES THE MARK AS WELL
Kohl’s also announced Q1 earnings and missed estimates as well. Total net income rose to $66 million, or 39 cents per share, in the first quarter ended April 29, from $17 million, or 9 cents per share, a year earlier.
The company posted adjusted earnings of 39 cents per share on $3.84 billion in sales, compared to the analyst estimates of 29 cents per share and $3.91 billion in revenue. In last year’s first quarter, the retailer reported $3.97 billion in revenue and 31 cents per share in adjusted earnings.
Same store sales fell 2.7% against a projected consensus of a 1.2% decline. Even so, the decline was lessened compared to last year, where Kohl’s Q1 2016 showed a 3.9% decline. The retailer’s gross margin improved 83 basis points to 36.4% from 35.5% in the year-ago quarter.
While Kohl’s shares fell by as much as 3.65% to $38.85, according to reports.