Macy’s sales keep shrinking as Americans stay away from the mall.
Revenue tumbled 6.1% last quarter, the 11th straight quarterly decline. It was a deeper slide than Wall Street had feared.
The good news is that Macy’s made more money than expected. And although Macy’s already expects sales to be down this year, the outlook didn’t get any worse.
The mixed bag from Macy’s didn’t do much to help its beat-up stock. It was slightly higher before the market opened. The stock has lost half its value this year.
CEO Jeff Gennette struck a hopeful tone, saying he’s “pleased with the results,” especially a double-digit jump in online sales stay away from the mall.
Gennette predicted “continued improvements in our trends in the fourth quarter, including a solid lift from loyalty and digital.” Macy’s launched its Star Rewards loyalty program during the third quarter and said customers are already “responding positively.”
Yet Macy’s, like other brick-and-mortar retailers, still faces a big challenge as shoppers flock to Amazon and other online sites. Walmart, through its acquisitions of the e-commerce platform Jet.com and the online retailer Bonobos, is also making strides online.
These obstacles explain why Macy’s still expects full-year sales at stores it owns to drop 2.2% to 3.3%.
Kohl’s, another traditional retailer, is also in trouble. The chain said on Thursday that profit plunged 20% last quarter, missing the Street’s targets. Sales grew unexpectedly, but Kohl’s stock still got punished, dropping 9% in premarket trading.
Traditional stores have cut back on pre-holiday hiring. Retail employment rose by 136,700 in October, the lowest for the month since 2011, according to the job-placement firm Challenger, Gray & Christmas.