NEW YORK (AP) – Macy’s, the nation’s largest department store chain, says its earnings for the quarter that includes the holiday period dropped nearly 13 percent as results were dragged down by lower sales, store closures and other costs.
The profit results beat Wall Street expectations, but Macy’s said it would post another year of sales declines for a key revenue measure. Like many department stores, Macy’s has faced sluggish sales as customers buy more online and less at the malls where they are often an anchor. Macy’s has been shuttering stores as it tries to regroup.
Macy’s has also been under pressure from shareholders to get more value out of its real estate holdings, valued by activist investor Starboard at nearly $21 billion. The chain has reportedly been in preliminary talks with Hudson’s Bay about a takeover or a real estate deal. However, Macy’s declined to talk about the topic to investors on a call Tuesday, saying it doesn’t comment on rumors. It did say it will be looking to further monetize its locations and that it made $673 million in the latest year in asset sales.
For the three months ended Jan. 28, Macy’s earned $475 million, or $1.54 per share. That compares with $544 million, or $1.73 per share, in the year-ago period. Adjusted earnings per share came to $2.02. Analysts had expected $1.95 per share for the quarter, according to FactSet. Revenue fell 4 percent to $8.52 billion, while analysts had expected $8.61 billion.
“While 2016 was not the year we expected, we made significant progress on key initiatives that are starting to bear fruit,” Macy’s CEO Terry Lundgren said in a statement. He will be stepping down March 23 and will be succeeded by president Jeff Gennette.