CINCINNATI (AP) – With a hint at what may be in store for shoppers this holiday season, Macy’s CEO Terry Lundgren said markdowns are likely as falling sales have left the department store with excessive inventory.
The opening of the retail earnings seasons began ominously with Macy’s, which dragged shares of almost every retailer sharply lower Wednesday. The retail sector was by far the biggest loser on the Standard & Poor’s index.
Sales for the Cincinnati company fell 3.6 percent at established locations for the three months ending Oct. 31. And for the last three months of the year that encompasses the critical holiday shopping season, Macy’s expects sales to fall between 2 percent and 3 percent from a year ago. The company cut its profit forecast for the full year, sending shares down more than 14 percent to two-year lows.
Not all retailers are suffering. Spending is up on electronics and stores like The Home Depot are posting huge sales numbers. But traditional retailers, particularly Macy’s, are getting hit hard as the strong dollar limits the spending power of international customers.
The company also blamed warmer weather, which cut into sales of coats, boots and down comforters.