Macy’s shares fell 5% after hours Wednesday after the department-store operator announced 68 store closures and issued a profit warning. It said the store closures would eliminate 3,900 jobs, while a restructuring in early 2017 would result in the cutting of 6,200 employees. The majority of the 68 store closings are slated to take place in 2017 and are part of the planned 100 closings announced in August 2016. Because of the store shutdowns, Macy’s said it expects 2017 sales to see a negative impact of $575 million. “We continue to experience declining traffic in our stores, where the majority of our business is still transacted,” said Terry Lundgren, chief executive of Macy’s, adding that the online operation is seeing strong sales. With Wednesday’s announcement, the company expects to see $250 million in charges to be recorded in the fourth quarter of 2016, which was not previously included in the guidance. The company is also looking to sell real estate and said it has entered into an agreement to sell its downtown Minneapolis store to 601W Cos. Shares of Macy’s have fallen 15.6% in the past month, as compared with the S&P 500’s gain of 3.6%. (A previous version of this Market Pulse item included the job reduction resulting from restructuring but not store closures. It has been updated.)
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News