Macy’s lowered its annual earnings guidance after the department store struggled with a big earnings miss during the second quarter as it was forced to slash prices on unsold merchandise.
The department store said Wednesday a combination of factors including a fashion miss, slow sell-through of warm weather clothing and an accelerating decline in international tourism led to rising inventory levels.
Macy’s also raised another red flag: shoppers don’t have an appetite for higher prices in a ballooning U.S. trade war with China. Macy’s was forced to raise prices on some luggage, housewares and furniture to offset the costs of a 25% tariff implemented in May on those types of goods.
Retailers are bracing for a 10% tariff targeting items like toys, clothing and shoes that had been scheduled for September. Some of those items have now been delayed until December. Macy’s CEO Jeff Gennette told analysts during an earnings call that the retailer will not be increasing prices as a result of the 10% tariffs. But he said the company will have to work hard with its vendor partners to offset costs if Trump goes ahead with his threat to ratchet the tariffs up to 25% in the event China won’t agree to a trade deal.
American Airlines wants cash from 2 labor unions
American Airlines wants two labor unions to pay damages and the company’s attorney fees, saying they ignored a judge’s order to quickly end a work slowdown by mechanics.
American hasn’t put a dollar figure on its request but says the slowdown caused “enormous financial losses” from canceled flights.
Earlier this week, U.S. District Court Judge John McBryde ruled for American in its lawsuit against the Transport Workers Union and the International Association of Machinists and Aerospace Workers, which represent the mechanics.
American says workers took longer to fix planes and refused overtime to pressure the company during contract negotiations. The airline says the slowdown continued after the judge issued an injunction in mid-June, causing more than 950 flights to be canceled and another 280 to be delayed at least two hours.
The unions, which have been trying to get a new contract with American for more than three years, deny wrongdoing.
WeWork growing but losing money
WeWork’s parent company is giving investors the most detailed look yet at its finances ahead of its anticipated stock market debut.
The office-sharing company revealed breakneck growth on the back of massive losses Wednesday in regulatory filing. Investors are looking for a clearer picture of how the venture capital darling plans to chart a path toward profitability, and whether its business model can withstand an economic downturn.
In 2018, WeWork lost $1.61 billion while bringing in $1.82 billion in revenue. Its latest filing showed the company on track for another year of impressive growth, having generated $1.54 billion in the first half of 2019. But it also lost $689.7 million in that same period.