Macy's Misses, Forms China E-Commerce Joint Venture

Reuters

Macy's Inc (NYSE:M)reported lower-than-expected quarterly sales as a strong dollar "significantly" hurt spending by foreign tourists in the United States and the company discounted to clear merchandise delayed due to the West Coast ports strikes.

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The company also said it had formed a joint venture with a Hong Kong-based company to explore online retailing in China.

Shares of Macy's, which operates its namesake stores and the upscale Bloomingdale's chain, fell about 2 percent in premarket trading on Wednesday.

The company was also hurt by the removal of a major promotional event.

Macy's same-store sales, including licensed departments, fell 1.5 percent in the second quarter. Analysts on average had expected a 1.3 percent rise, according to research firm Consensus Metrix.

Macy's said it expected same-store sales to remain flat in the year ending January 2016. The company had earlier forecast a rise of about 2 percent.

The retailer said it would start selling its products online in China later this year through Alibaba Group Holdings Ltd's Tmall Global.

Macy's will own 65 percent stake in the joint venture with Fung Retailing Ltd.

The company's net income fell to $217 million, or 64 cents per share, in the quarter ended Aug. 1 from $292 million, or 80 cents per share, a year earlier.

Net sales fell 2.6 percent to $6.10 billion, the fourth drop in six quarters.

Analysts on average had expected earnings of 76 cents per share and revenue of $6.23 billion, according to Thomson Reuters I/B/E/S.

Macy's shares were trading at $66.35 before the bell.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Kirti Pandey)

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