Macy’s, the largest department store in the United States, saw slightly improved sales in all its stores during the holiday season, but like other retailers warned of a potentially rocky year ahead.
Macy’s reported that comparable sales in stores dropped by 1.1 % in the fourth quarter, which ended on February 1st.
Macy’s entered the holiday season facing difficult challenges, including the most conscious consumers, weakening profitability and a strange accounting error. It is in the middle of a recovery plan that includes the shutdown of low performance positions and the improvement of the rest of its stores with more staffing and better goods. It has closed about 66 of 150 scheduled stores so far.
While Macy sees signs of optimism, the prediction offered by Wall Street has shown that it expects to bring less revenue than recent use, partly due to the closure of the store. The retailer said he expects net sales being $ 21.4 billion, out of $ 22.3 billion last year. It expects that comparable sales will be reduced by 2 %.
David Swartz, a senior stock analyst at Morningstar, warned that investors and analysts as he “must see more” to be convinced that the department store strategy to reverse his possessions is really working.
“When you own hundreds of stores, some of them will be really good and some of them in the middle and some of them are terrible,” he said, adding that “the fact that the best stores are doing well not really telling you so much for the health of the whole company, unfortunately.”
But there are factors to navigate to Macy’s and other retailers next year they are out of control.
Invoices recently imposed by President Trump have been launched by retailers as they report their latest finances. These invoices, which came into force on Tuesday, place a 25 % contribution to most imports of Mexico and Canada to the United States and an additional 10 % on Chinese goods.
Target noted on Tuesday that invoices were a factor that could ask customers to contain the costs. Corie Barry, Managing Director of Best Buy, said prices for US consumers were “very likely” as they expect sellers to “go to some level of tariff spending on retailers”.
Despite the warning of the challenges that invoices could bring, including additional expenses, some retailers tried to put a brave person on it, noting that they had already worked to reduce their possible exposure to invoices.
Steve Miller, head of financial director of Warby Parker, said on February 27 that the company had differentiated its suppliers over the past five years to reduce duties exposure, noting that China represents 20 % of its costs.
“We have a lot of levers to manage a dynamic pricing environment,” he said.
TJX, owner of TJ Maxx and Marshalls, noted on February 26 that he is expecting a “small negative impact” from the invoices in the first half of the year, but John Klinger, head of financial director of the retailer, said that the company remained “confident in our Our future buy. “
Some brands have also recognized the uncertainty that has created the invoices of Mr Trump, which can weaken business.
John M. Vandemore, the head of the Sketchers chief financial director, was joking on Tuesday that “between when I left my hotel room and went down, I had to check and make sure there were no new Tari FF” before receiving their questions. He also noted that the footwear company had a “fairly fixed path” to absorb costs.
Mr Swartz, analyst Morningstar, said that while retailers are worried about invoices, it is not necessarily a new threat.
“Some of the invoices in China were never deducted when Biden was president,” he said, giving companies to adapt.
If investors believed that the last round of invoices were the start of a serious trade war that would last for years, “you will see that stocks will be crushed all over the place,” he said.
Finally, he added, “makes no sense” for Mr Trump “to really cause a recession that would make people very angry with him.”
