Macy’s cuts its sales and earnings forecasts for 2016
US retail giant Macy's cut its sales and earnings growth forecasts, as consumers remain reluctant to splash the cash.
It now expects full-year comparable sales to slump between three to four per cent, compared to its previous guidance for a decline of about one per cent.
Terry Lundgren, Macy's chairman and chief executive officer, said: "We have an opportunity to make up some ground in the months ahead, and particularly in the fourth quarter. But as a result of these factors, we believe it is prudent to reduce our sales and earnings guidance for the 2016 fiscal year."
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Net sales slumped 7.4 per cent to $5.8bn (£4bn) in the 13 weeks ended 30 April, compared to $6.2bn a year earlier.
Operating income came in 32.5 per cent lower at $276m for the first quarter, down from $409m in the same period last year.
Macy's board hiked its quarterly dividend to 37.75 cents per share, more than the current 36 cents.
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"We are seeing continued weakness in consumer spending levels for apparel and related categories. In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook," Lundgren added.
"Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy's and Bloomingdale's are key destinations — further intensifying the challenges associated with growing topline sales revenue."