Macy’s stock is down 50% so far this year. Here’s why the famous retailer is struggling: by skleb1234
and cut thousands of jobs as mall traffic falls and customers increasingly switch to online shopping. This trend has also hit other retailers, which have similarly struggled and lowered their outlooks this year. Macy’s earnings triggered a broader sell-off among retail stocks like Nordstrom, JCPenney and Kohl’s earlier this summer. Shares of those companies are down 33%, 27%, and 28% for the year, respectively.
Despite a grim outlook, there are some signs for optimism going forward. Macy’s identifies women shoppers younger than 40 as a key growth “opportunity” to improve its sales. The company has also spent heavily on updating and remodeling its stores, making more of a switch to digital features and an online business. from targeted promotions and better pricing, through which it aims to save $400 million to $550 million annually for the next two to four years.
In a recent note, JPMorgan analyst Matthew Boss puts the stock’s price target at $16; he writes that Macy’s remains “constrained by declining brick-and-mortar sales” and tight margins, especially as there is “no visibility toward a less pressured U.S. wholesale environment” in the near term. Credit Suisse analyst Michael Binetti, on the other hand, sees slightly more upside, putting the stock’s expected price at $19. While he identified the benefits of the new long-term cost savings plan, he wrote that “we remain concerned around Macy’s ability to raise prices to help offset recent cost pressures and the persistent tariff threat.”
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