Macy’s Inc. is being removed from the S&P 500.
According to the S&P Dow Jones Indices, which oversees the index, the department store chain will be replaced by air conditioning company Carrier Global Corp. It will join the S&P 600 Small Cap index on Monday.
The retailer’s market capitalization is about $1.5 billion, the smallest in the S&P 500 and roughly a quarter of what it was last year. So far in 2020, it has shed more than 70% of its value.
“Macy’s has a market capitalization more representative of the small-cap market space,” S&P Dow Jones Indices said in a statement. Its shares were down more than 5% to $4.64 in Wednesday premarket trading.
Over the past week, Macy’s has made headlines as the coronavirus pandemic continues to take a heavy toll on its business: The company, whose stores across the country remain closed, announced this week its decision to furlough the majority of its employees, while CEO Jeff Gennette forgoes his salary and senior members of the management team receive pay reductions.
On top of these cost-cutting measures, the retailer added that it had frozen both hiring and spending, and had suspended its quarterly dividend, deferred capital spend and tapped its $1.5 billion revolving credit facility. It withdrew its sales and earnings outlook for the 2020 fiscal year and did not offer an updated forecast amid the crisis.
In its third-quarter earnings report ended Nov. 2, Macy’s logged its first same-store sales decline in two years and slashed its guidance for the full year. Execs blamed the disappointing results on the warmer fall season, coupled with slowing foot traffic, amid a broader shift from brick-and-mortar to online retail.
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