Macy’s, the largest U.S. department store operator, has lost nearly 60% of its stock market value this year.
The Cincinnati, Ohio-based retailer’s stock declined as much as 18% on Wednesday, after cutting its 2019 adjusted profit in addition to huge markdowns on products.
The growth of e-commerce companies, such as Amazon , has affected the large stores in recent times and the escalating trade war between the United States and China has made things worse for the entire industry this year.
Macy’s reported a very unimpressive 0.3% increase in second-quarter comparable sales, including licensed departments. They have continued to lose market share to the likes of Target, T.J. Maxx, and Ulta Beauty.
The second quarter 2019 profit of $86 million reported, or 28 cents per share, fell far below 46 cents per share that many analysts had expected.
Macy’s also trimmed its profit outlook for the year to between $2.85 and $3.05 per share, down from a range of $3.05 to $3.25.
But the company is blaming factors such as bad weather and “fashion misses” in its women’s sportswear business, particularly its own brands.
“We had a slow start to the quarter and finished below our expectations,” Chief Executive Jeff Gennette said in a statement.
The 160-year-old company, whose flagship building in Manhattan is a major tourist attraction, also blames a bigger-than-expected decline in tourist spending for the loss of revenue and subsequent decline in share price.
Tourist arrivals to the U.S have decreased since the beginning of 2019, no thanks to a stronger dollar and escalating trade tensions between the U.S and China, reducing the number of Chinese visitors to the United States.
According to the National Travel and Tourism Office, the number of Chinese citizens arriving in the United States decreased by 2.8% in the first six months of the year,
Like its peers, Macy’s, which has closed more than 100 stores since 2015 and cut thousands of jobs as mall traffic plummeted, faltered in the past few years as it struggled to adjust to a fiercely competitive retail landscape where shoppers buy more goods online at places like Amazon.com Inc <AMZN.O>.
“While they are controlling what they can control, the headwinds from both macro and micro factors continue to grow, creating a challenging backdrop for CEO Jeff Gennette to manage through,” said Gordon Haskett analyst Chuck Grom. “The good news is that they have a plan,” he added.
In a move to bounce back, Macy’s is currently pumping money into projects such as remodeling its stores and building up its off-price and online businesses.
The company also announced a partnership with fashion resale marketplace thredUP, aimed at helping the chain “reach a new customer and keep them coming back to shop…,” the company said. Hopefully, Macy’s will bounce back soon.