Macy’s lower profit forecast, announced yesterday, has sent other retail stocks, like Walmart, Michael Kors and Ross Stores, into a nosedive, as investors worry about the overall health of the sector.
Macy’s full-year earnings will be $3.15 to $3.40/share, down from an earlier forecast of $3.80 to $3.90/share—and the company missed on Q1 revenue as well, both signs that the slow foot traffic at shopping malls continues to weigh heavily on US department stores.
Macy’s shares plunged 14% on the news, its worst intraday decline in six months, while Walmart slid 4.6% and Target posted a 5% drop.
A combination of trends are working against companies like Macy’s, Stifel Financial analyst Richard Jaffe tells Bloomberg. “The consumer is not shopping, the trends aren’t inspiring them to buy, the weather isn’t inspiring them to buy, the international tourist isn’t spending.” [Bloomberg]
