Macy’s Inc. has its work cut out for it.
The department store chain has faced an uphill battle amid turbulent retail times as slumping sales and a failure to resonate with a rising class of demanding shoppers forced it to ditch more than 100 stores and lay off thousands of workers.
And even with all of its efforts to boost e-commerce, improve in-store experiences, offer more product exclusives and clean up advertising promotions, investors and market watchers appear overwhelmingly sidelined when it comes to the company.
Case in point: In January, Macy’s prereleased better-than-expected holiday results showing a comp gain of 1 percent. But shareholders still opted to sell the firm’s shares, apparently unscathed by modest gains and fearful that the success could have been a one-off boost from generally upbeat consumers.
Meanwhile, new research — which surveyed more than 400 clothing and footwear consumers across the country — found that about 26 percent of shoppers are spending less of their budget at Macy’s now than they did three years ago. Instead, they’re taking their dollars to Amazon, T.J. Maxx/Marshalls, Target, Kohl’s and Walmart.
As more of these developments make their way to investors and other stakeholders, the pressure mounts for the beleaguered retailer — which continues to narrow its store fleet, announcing 11 closings in January — to prove that it has what it takes to survive, and ultimately thrive, in retail’s new normal. It is particularly critical that the retailer prove its moderate November and December improvements were not a residual effect of overall positive consumer sentiment during the holidays and those gains extended into January and March.
When Macy’s produces fourth-quarter results Tuesday, market watchers expect to see a sales gain of 2.4 percent to $8.65 billion. Earnings per diluted share are forecast to rise 33 percent to $2.68.