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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WTF happened to JCP?
They got bailed out multiple times, and rates were low for those[multiple] credit lines, and their stock was $9.00.
Private Equity<> dark pools
Sales crashed through the floor because of...wait for it...warm shopping weather...I bet the fucker who writes that kind of shit still has a job.
Trumps curse. They dropped him and now they have dropped. A big mudpie in Macy's PC face.
Well, Americans are broke and, consequenlty, have virtually no spending power.
So, I guess they can't afford to buy Ralph Lauren Polo shirts that are made in the Mariana Islands with slave labor and sold at Macy's for $70 per shirt.
We used to make great textiles in the U.S. But, now, companies like Ralph Lauren don't use American labor.
Although the US is tops in producing debt.
Eventually it will matter.
Do you think that it's easier to work as a seamstress than as an office employee? Which environment is nozier and harder on your eyes? Which job will an American prefer?
The boycott worked!
I do think their management should be fired for incompetence. It is not their business plan though I'm criticising (I don't know what it is), but the simple fact that they decided to wade into a political debate causing harm to their business, utterly stupid and it did nothing for their bottom line.
It is a similar thing with Benedict Cumberbatch in the UK, he's had some sucess playing a new modern interpretation of Sherlock homes, but recently he's been in theatres where he lectures the audience about how they should be helping all those migrants who want to come into Europe after the show. The arrogance of the man is breath taking to assume people going to the theatre want to be lectured on his politics, and despite enjoying his initial shows I can't stand looking at the mong now, I'm sure it has hurt his career and will continue to damage it in future. I guess that's the difference between a big star who has become successful and a small time actor that might have had the talent, but just lacks the discipline to get to the top.
He actually talks to the audience? About how good immigration has been? The guys a true psycho moron. How sad. (from a now ex-admirer.)
Macy's and malls represent Suburbia which is collapsing.
A massacre on 34th Street?
Besides Macy's this guy liked the red star.
Che Guevara
https://www.thechestore.com/shop/che-guevara-cuban-military-beret-red-star/
I like this one better
http://unsavoryagents.com/?projects=dou-che
Didn't they fuck with the Trumpster.
An executive I know who works for one of the luxury retailers described the holiday selling season as horrible.
He's got 30 years' experience in retail so he knows what he is talking about.
I was in a few different stores this Chistmas season. Not Chistmas shopping but picking up the regular stuff that I use.
Everytime and every store I went to, it was in and out. Walk in, look down at the floor, glass my eyes over, head to the oil filters.
Grab a filter, oil, look down at the floor, glass my eyes over, head to the register and out the door.
Dont even remember hearing any Christmas music.
In 2014, I was at South Coast Plaza in Orange County. It was packed with the Chinese buying everything in stores like Chanel, Dior, Saks 5th Ave... There are not as many this year.
M may be 20 points below its Aug 24th close of 57, but the following indices and sectors are also below their 8/24 crash close, and the list grows every down day:
VALUG, DJTA, RUT, MID, SML, XBD, XTC, XRT, XAX, XLB, XOI, OSX, XLE.
Money is trying to hide in big caps, but a few more minus 1-2-3% days like today and the markets will be little more than a running game: No more trying to hide in plain sight - of the oncoming crash.
The warm weather is to blame? Geesh! Don't tell Florida, Alabama, Georgia, or Louisiana or even Texas about that.
If America ever gets a financial clue and stops buying tons more shit than they need and if it figures out that they it's just grinding itself down on the debt slavery hamster wheel to make others rich then the outlook for retail is horrifying.
At the end of debt levels of consumption could fall so drastically as to make most people slack jawed in awe.
The good news is it wouldn't hurt anyone to get a little Sparta on and live with less and we don't make much anyway but China would get it right in the nuts.
Just don't fire the balloons
No TG parade for you!
Sum times...ya gotta love a good distraction:
http://investmentwatchblog.com/the-general-election-in-two-photos-donald...
Shut up the economy is better everyone knows the blond lady on the tv with big boobs and red lips said so, if you dont believe her you are sexist and speciesist and gender biased because she is also a transgender transpecie rhinoceros.
People don't go to Macy's because of the people who go to Macy's.
Macy's is a crimminal oganization. They lie, cheat and steal from their customers. Using fraud and lies they strung me along on an $18.00 error (their fault) saying they would fix it. When the amount got over the right dollar value thanks to their huge "late" payment fees, they turned the balance over for collection. I had to pay the blackmail amount to save my credit rating - which they then trashed anyway.
DON'T BUY AT MACY'S-THEY ARE CROOKS.
CROOKS
CROOKS
CROOKS
Meterman - That experience sounds like all corporations these days. Total lawlessness. Anyways, agree with many posters. Americans are broke and those with some scratch are pulling up there horns.
Last year was OK in business for me but I got really lucky and got one huge contract that died in September. But did get a littlw more hedging in.
Problem is I am bored when economy is this slow. Too much drinking, lamenting the death of my once beloved Republic.
I hear Goodwill,the Salvation Army and a lot of local thrift shops are packing them in!
Millions with no education, no money, no skills, don't speak our language, but kids in tow and more on the way streaming across our southern border and soaking up the full boat of entitlement programs - keep voting democrap - it's working!
"Immigrants" being forced fed to us from all over the globe with no education, no money, no skills, don't speak our language, but kids in tow and more on the way and soaking up the full boat of entitlement programs - keep voting democrap - it's working!
Tens of thousands of illegal alien thugs roam America never to be deported - keep voting democrap - it's working!
Then there are the thousands of felons being let out of our jails - keep voting democrap - it's working!
51% of working Americans earn less than 30k a year - keep voting democrap - it's working!
But sure - Macy's issues are just a bump in the retail landscape brought about by the "weather!"
Yeah, sure. It's a "weather" problem. That's it . . .
Of course it's a "weather"problem. Like all the other lies we are being fed about the economy, it's the weather's fault or some other nonsense fault. Trouble is that many online retailers are also not doing well. The whole thing is going to hit the fan this year, I am afraid.
Macy's lived and died by their sales. They became the norm. Their value was killed by MBA beancounters
It's all about Amazon . . . I don't want to waste my time going to Macys or any other brick and mortar, who has the time for that not to mention the bullshit that goes with it. Their websites also suck so they got that going for them. The whole retail shopping experience is about exceptional product discover (show it as close to real as possible). Refund it, if I don't like it without bullshit . . . that would be Amazon prime. . . bezos has the world by the balls, for now at least. . .
Why would you buy any clothes or shoes on Amazon if you can't try them on?
Of course, it's not a problem if you just need a pair of the same jeans.
If you watch American movies from the 50-60s, Americans used to wear really nice clothes then, not just jeans like now.
Macys dogged Trump. Remember? BACKLASH
Iteresting enough, my wife went to Marcy yesterday to buy cloths for herself. I was shocked that she came home with nothing.
She said the problem with Macys is they no longer carry the classic clothing they were famous for. Just junk from China/Asia with horrible strange colors and no style.
It is very clear that Macy has a much bigger problems than the weather.
Speaking of massacres, has anyone seen the sales stats for this holiday season? The last I heard was that Black Friday sales were shit but since then, absolutely nothing. Since there seems to be nothing in the MSM, I am assuming it must be much worse than was expected.
Excellent, die you PC POS
They told Trump to take his tie's and stick it. Well, fuck with the bull get the horns.
Well, about three months ago, this report would have made their stock jump up 5%, on the belief that the FED would not raise rates now...
LMAO!......I wonder how many nastygrams Yellon has recieved over her rate hike from the punch bowl drunks?.......
Fuck Macy's. Shit store, shit merchandise, shit employees. Sears without the tools.
I spent about $250 at Macy's a year ago.
It bought 6 paris of Dockers, 4 pairs of shorts, 6 Tshirts (triple weave cotton), 10 collared button shirts.
It was the autumn clearange of summer clothes and they were on sale from 50-80% off.
They do these sales twice a year.
On the way out of the store I kept thinking that the business model that allowed me to walk out with such cheap merchandise was bound to fail.
I can't wait for the going out of business sale!
(but I do feel sorry for the employees because they were all super nice and don't deserve what's coming down the pipe).
Definitely agree.
I usually go into department stores twice a year, when they have 50-80% off sales. Buy a few replacement shirts, pants and t-shirts, and that's it. Total of maybe $120-150 while on sale. Then they give me a $20 off coupon for my next visit, which doesn't happen in time anyway.
If everybody bought at the level that I buy, they would be bankrupt already, if not for low interest rates, of course. Department stores are the zombies of retail. Soon, they will dissapear into the dustbin of history.
I has to be global warming.