Store Closures Cost Macy’s $230M In Q4
Poor holiday sales and store closings caused profits at Macy’s slump during the fourth quarter.
The Cincinnati-based department store chain reported profits of $475 million in the quarter ending January 28, down nearly 13 percent from the same time last year. That drop paled in comparison to fiscal 2016 overall, where profits fell 38 percent.
“While 2016 was not the year we expected, we made significant progress on key initiatives that are starting to bear fruit,” CEO Terry Lundgren said in a statement. “We also took a big step forward in rightsizing our physical footprint and restructuring our entire organization.”
Store closings and related charges cost the company $230 million during the quarter. Among the stores included in the closings was the former Dayton’s store on Nicollet Mall in Minneapolis. TCB broke the news of the stores impending closure in December, with an announcement made in early January. The location’s closing wasn’t just performance related: While it wasn’t a top-seller in the state, its location in the heart of downtown likely made it a lucrative piece of real estate to spin off.
The Nicollet Mall store will close in March. New York-based 601W Companies has an agreement in place to purchase the building and redevelop it, though no plans have been publicly revealed.
Despite the bad news, adjusted earnings per share of $2.02 beat analysts’ expectations of $1.97. Shares of Macy’s were up a quarter percent by mid-afternoon trading to $32.39.