Macy's earnings beat; new restructuring plan targets $100 million in annual cost savings
Macy'sThe department store chain also announced a restructuring plan that it said should help it generate annual cost savings of $100 million. It said part of this plan consists of reorganizing upper management, cutting 100 vice-president level or above roles,"to increase the speed of decision making."
"The steps we are announcing to further streamline our management structure will allow us to move faster, reduce costs and be more responsive to changing customer expectations," CEO Jeff Gennette said in a statement.Here's what the retailer reported compared with what analysts were expecting, based on Refinitiv data:*Revenue: $8.46 billion vs. $8.45 billion expected
*Same-store sales: up 0.7 percent vs. growth of 0.9 percent, on an owned plus licensed basis, expected Looking to 2019, Macy's is calling for same-store sales, on an owned plus licensed basis, to be flat to up 1 percent. It says net sales will be about flat. Earnings are expected to fall between $3.05 to $3.25 a share.Last month, the department store chain said traffic at stores softened during the middle of December and didn't pick back up like Macy's was anticipating until Christmas week.
Now, analysts and investors are skeptical Macy's investments to grow sales will ultimately pay off. Macy's has added pop-up shops for online brands in its stores, experimented with virtual reality headsets to sell furniture, rolled out a mobile checkout option, revamped its mobile app, and grew its off-price business, Macy's Backstage. The department store chain has also said it plans to start downsizing some locations, as it doesn't need as much real estate.
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