Macy’s stock posted its largest single-day percentage decline on record in trading Thursday after the struggling retailer warned of weak holiday sales and slashed its full-year forecast.
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Shares declined nearly 18 percent after the company said it now expects same-store sales growth of 2 percent in fiscal 2018, down from an earlier forecast of between 2.3 percent and 2.5 percent. Macy’s also cut its earnings guidance to $3.95 to $4.00 per share, down from an earlier projection of $4.10 to $4.30.
The percentage decrease was Macy’s largest decline dating back to at least February 5, 1992, according to data from Dow Jones Market Data Group. The plunge erased $1.7 billion from Macy’s overall valuation.
“The holiday season began strong – particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” Macy’s Chairman and CEO Jeff Gennette said in a statement, noting that sales of seasonal sleepwear, women’s sportswear and fashion jewelry were particularly weak during the holiday season.
Macy’s combined same-store and online sales rose by 1.1 percent in November and December. For the full year, the retailer said it expects net sales to remain flat, after previous forecasting a slight increase.
The company’s weak results weighed on the overall retail sector in Thursday’s market session. Macy’s shares are down 64 percent from their all-time closing high of $72.80, posted on July 16, 2015.
Target, Nordstrom and troubled J.C. Penney fell in sympathy.
Traditional retailers are struggling to maintain store traffic amid the rise of e-commerce and tougher competition. Sears said this week that it could liquidate unless its former CEO Eddie Lampert improves his bid to buy the company out of bankruptcy.
Macy’s is expected to report fourth-quarter earnings on February 26.