Macy’s Signals a Rocky Year Ahead as Trade War Looms

Macy’s, the largest department store in the United States, saw slightly improved sales across all of its stores during the holiday season, but like other retailers it warned of a potentially rocky year ahead.

Macy’s said comparable sales at stores that it owns were down 1.1 percent in its fiscal fourth quarter, which ended Feb. 1. Across all of Macy’s nameplates, which include Bloomingdale’s and Bluemercury, as well as its licensed business and online marketplace, sales rose 0.2 percent, the best result in many quarters.

Macy’s entered the holiday season facing tough challenges, including more cost-conscious consumers, weakening profitability and a bizarre accounting error. It is in the midst of a turnaround plan that includes closing underperforming locations and improving its remaining stores with more staffing and better merchandise. It has closed about 66 of 150 planned stores so far.

While Macy’s sees signs of optimism, the forecast it offered Wall Street showed that it expects to bring in less revenue than it did last fiscal year, in part because of the store closures. The retailer said it expects net sales to be $21 to $21.4 billion, down from the $22.3 billion this past year. It expects comparable sales to fall as much as 2 percent.

David Swartz, a senior equity analyst at Morningstar, cautioned that investors and analysts like himself “need to see more” in order to be convinced that the department store’s strategy to reverse its fortunes is really working.

“When you own hundreds of stores, some of them are going to be really good and some of them in the middle and some of them are terrible,” he said, adding that “the fact that the better stores are performing fairly well does not really tell you that much about the health of the whole company, unfortunately.”