Macy's Massacre: Thousands Fired; Guidance Slashed (Again); Weather Blamed
It was less than two months ago when we brought to you the "Macy's Massacre": on November 11, the stock of the iconic retailer crashed 13% and its CDS soared after Macy's announced a trifecta of weak data, reporting a miss on Q3 sales which came at $5.87 billion below the $6.1 billion expected, down from the $6.2 billion, as well as a plunge in comparable store sales which tumbled by 3.9%, far worse than the expected drop of -0.4%, and nearly three times as bad as the 1.4% drop a year ago.
Cash flow plunged: cash provided by operating activities was $278 million in the first three quarters of 2015, compared with $841 million in the first three quarters of 2014.
Finally, M also slashed its full year same store guidance down from flat to -1.8% to -2.2% with sales projected to drop -2.7% to -3.1%, compared to a previous guidance of -1%, as contrary to the propaganda, the discretionary spending of the US consumer is bad and getting worse by the day.
Fast forward to today when the massacre is back with a vengeance, after the company not only reported yet another cut in its guidance, but also announced it would be laying off another boatload of retailers, demonstrating just how strong the "service" economy truly is.
First, Macy’s said that its comparable sales on an owned plus licensed basis declined by 4.7% percent in the months of November and December 2015 combined, compared with the same period last year. This compares to previous, already poor guidance, of -2% to -3%. The weather was, of course, blamed.
“The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry. In the November/December period, we were particularly disadvantaged by the historically warm weather in northern climate zones where both Macy’s and Bloomingdale’s are especially well-represented. About 80 percent of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods such as coats, sweaters, boots, hats, gloves and scarves. We also continued to feel the impact of lower spending by international tourists as the value of the dollar remained strong,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer.
Compare this to Macy's 8-K from precisely two years ago, and try not to laugh too hard:
"poor January sales were due to the unusually harsh winter weather across much of the country. Once warm spring weather arrives and our full assortment of fresh spring merchandise is in place, we believe customers will return to a more normalized pattern of shopping."
So much for the comedy, now back to the tragedy for shareholders, as the company admits not even "harsh cold weather" can save it as it slashes earnings guidance...
Macy’s, Inc. is not expecting a major change in sales trend in January and expects a comparable sales decline on an owned plus licensed basis in the fourth quarter of 2015 to approximate the 4.7 percent decline in November/December (from previous guidance of down between 2 percent and 3 percent for the fourth quarter). This calculates to guidance for comparable sales on an owned plus licensed basis in the full-year 2015 to decline by approximately 2.7 percent (from previous guidance of down 1.8 percent to 2.2 percent).
Earnings per diluted share for the full-year 2015 now are expected in the range of $3.85 to $3.90, excluding expenses related to cost efficiencies announced today and asset impairment charges associated primarily with spring 2016 store closings. This compares with previous guidance in the range of $4.20 to $4.30. Updated annual guidance calculates to guidance for fourth quarter earnings of $2.18 to $2.23 per diluted share, excluding charges associated with cost efficiencies and store closings. This compares with previous guidance for earnings per diluted share of $2.54 to $2.64 in the fourth quarter. Earnings guidance for 2015 includes an expected $250 million gain on the sale of real estate in downtown Brooklyn.
... and a tragedy for its employees, many of whom are about to be fired.
Macy’s, Inc. today announced a series of cost-efficiency and process improvement measures to be implemented beginning in early 2016 that will reduce SG&A expense by approximately $400 million while still investing in growth strategies, particularly in omnichannel capabilities at Macy’s and Bloomingdale’s. The actions represent progress toward the company’s previously stated goal of re-attaining over time an EBITDA rate as a percent of sales of 14 percent.
To address the need for greater efficiency and productivity, among the changes being implemented by Macy’s, Inc. in early 2016 are:
- Adjusting staffing levels at each Macy’s and Bloomingdale’s store in line with current sales volume to increase productivity and improve efficiency. An average of three to four positions will be affected in each of Macy’s and Bloomingdale’s approximately 770 going-forward stores (out of an average workforce of approximately 150 associates in each store), for a total of about 3,000 affected associates nationwide. Roughly 50 percent of affected store associates are expected to be placed in other positions.
- Implementing a voluntary separation opportunity for about 165 senior executives in Macy’s and Bloomingdale’s central stores, office and support functions who meet certain age and service requirements and chose to leave the company beginning in spring 2016. Approximately 35 percent of these executive positions will not be replaced.
- Reducing an additional 600 positions in back-office organizations by eliminating tasks, simplifying processes and combining positions, with about 150 of these associates reassigned to other positions.
Luckily, the US service economy is so very strong as Macy's results confirm, or otherwise someone might get the idea that the "manufacturing recession is not contained."
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I don't know ordered 7 things from Amazon, and only 2 of they "said" they are shipped 6 days later.
Seems to me.. next time will be with someone that can deliver form stock.
And as most know here Face-book Amazon and even APPL is mostly helicopter money from the printing presses of the USA fed.
I mean when you can get Billions for .001% interest and all you have to do is buy anything and who doesn't know to go long?
even if you only make 2% on a Billion you still as a prop trader make out, and if your wrong no problem no margin calls because CME knows your good for it(because I get Fed Money) just make a trade with another account and wait till it climbs back up, and when if finally crashes no biggie it the US middle class that is on the hook Bailout time again worst thing that can happens is I get another job.(escorts,booze and party's on Friday for all)
Run that baby up.. don't worry we are in the easy chair sure glad I am not a homeless or third world person who's income has gone down and cost of food has gone up, must suck to be hungry at the end of the month.
Bankers Motto, "I want more and I don't give a shit anything but ME, not my job to worry about the masses."
O wait that's congress same Motto.
Won't be long and the only retail will be Buttfuckers and Brwando vending machines..oh and Costco...
plants crave it
its gonna happen.
its gonna happen.
So true -- their 2-day shipping has morphed into 2-week shipping, unless it's coming from China via the Netherlands, then it's 2-months.
This might help explain Amazon's strange P/E ratio of 906 - soon they will control the world's retail.
Now that is funny
what ...fired employees? stock is now UP....ignore the lowered guidance all you need to know is that
We fired some folks
Same as LLY cutting guidance yesterday by 10% and the stock jumps 5%. The stock is rocketing up while sales and earnings continue to plunge
TRUMP 2016
Macy's: "We got calls from Hispanic people"
MACY'S 2016
https://s-media-cache-ak0.pinimg.com/736x/80/84/e5/8084e52937a0061d59fa2...
They messed with the Donald and got schlonged, eh ?
They can appease the illegal immigrants who work for slave wages and piss off the rest of America. That should turn out well. They can compete with Dollar Tree and Dollar General.
maybe they have a lot of tranny customers - hahaha! Is that pic for real ?!?
I know it's a lot to ask out of the obama supporters and sheeple these days, but it's been proven to help if you are educated on diverse topics, including but not limited to, economic cycles, buying trends, and new markets. It's really not that hard, but I understand video games and smart phones are all the rage. Just ask the obama supporter who fell off a cliff in San Diego. Being an idiot hurts.
you are the sheeple dumb fuck.
Awesome come back, LOL
you do realize you are one of the most retarded mother fuckers on ZH.
Radical.
Stop green arrowing yourself moron. The new sludge of ZH is why this site is a complete joke.
LOL I've been a member under differnet names since 2009. Same old sludge, I'm not new.
You been doing a lot of logging in then to make yourself look good and others bad. Do you get tired of being a piece of shit everyday?
No I have been banned a few times for not being politically correct. I have only ever used one account at a time. Next question.
Liar
One thing I never do is Lie.
Good job Tyler keeping your dog's.
Sock puppets and click farms in the cube matrix dominate all opinion mover sites that pop up on the radar...only a matter of time they take this one over. Not quite there yet though IMHO.
So an unemployed parent should just remain on welfare/unemployment rather than take a retail job, yes?
And if so, then when the welfare/unemployment payments stop they should just turn to a life of crime to feed the kids, yes?
Or perhaps take out $100K in loans to get an advanced degree, yes?
We understand your point (retail is dead), but blaming people for getting fired from these jobs is beyond stupid... as if they should just give up, let the kids starve, and collect welfare/unemployment forever. Something tells me you would flame these same people if they sat on the sofa and bought their food with EBT. They just can't win w/ you, right?
I think it would be best if people started to wake up and think BEFORE they have been terminated or labeled obsolete. There are ways to front run these things you know. I am willing to bet most of these workers have no idea what's going on around them, I mean have you had to interact with the average american lately. It's not going well.
I heard you had a rectal transplant but it rejected you.
So an unemployed parent should just remain on welfare/unemployment rather than take a retail job, yes?
I think that's the best way to crash the system, I have no problem with people loading up on statists goodies. Good luck trying to service those payments if everyone gets on them. I'm all for it.
Don't waste your breath with this moron. He is a socialist piece of shit.
I am the furthest from a socialist as one can be, I'm an anarchist. We have soft socialism here in America and corporate fascism already and I'm sick of it.
No you are not. Your comments and avatar prove you love socialism. You may think you are but you are a socialist piece of shit. Read one of your comments and see if you are smart enough to figure out the lies you spew.
LOL it's a joke dude, I am poking fun at socailism and Hitlery. Jeeze do I have to spell everything out for you.
I am calling you out. Somebody in your face which is anarchy now you want to laugh it off like it is a joke. Don't be a pussy. Did you figure it out or do I need to spell it out?
I think it's high time for this country to reap what it has sown. Americans need a wake up call, they are too wussy, lazy, fat, pathetic, they don't think, they are entitled. It needs to reformed back into the constitutional republic, the only was that happens is with a collapse. There that is my view.
I dont disagree, but anarchy is not a constitutional republic. I don't see how you truly care about the patriots of America being an anarchist.
I am a huge Patriot, I would agree there is not many more Patriotic than I. My family and friends all know this. I'm sorry but the way things are going, unless Obama is impeached immediately, we will be in full blown tyranny and a dictatorship. God help us is Hitlery gets in office. The best thing to have happen is Obama impeached and tried, the banking system to fully collapse for it to be exposed and then to go back to constitutional money. That is about the only way to save this USSA we have right now. People need a wake up call. The welfare system needs to collapse, no more free handouts.
Succession and you won't have to worry about anything else you mentioned.
Now you are getting somehere, there is a reason I moved to TX three years ago.
Hammer and Sickle = funny; cool; sarcastic; etc.
next time i get banned can I use a swastika avatar...?
even though bolsheviks and Stalin killed 5x more than Hitler, conservatively
deep thoughts
He knows what he is. He preaches truth this and truth that, but refuses to admit his own.
Please look at all my comments from the past year and then get back at me. Everyone here knows what I'm about. You can eat shit.
Still haven't figured it out. You have more in common with the Americans you talk shit about than you realize.
Talk is cheap, things have to get real, real fast in order for things to move forward. I am just sick of the III% because they always say - save it for another time. Time is running short is all. I was just real upset yesterday at everythign and trying to get a rise out of people, so they would think about things a little.
fair enough. I will now take a bow and exit.
Yesterday was an anomaly for me, trust me. I wish we could go back to an 1850's version of America.
that's pretty much what all socialist governments tell their people. eat shit.
Ani't it funny? And morons here in America are calling for Socialim. It's human nature to be lazy as fuck, they just don't know the end game.