Macy’s Plummets 17% After Cutting Guidance As Retailers Tumble
One week after Apple stock crashed when the company cut its revenue guidance for the first time in 16 years, today it’s the retailers fault to pull the rug from under investors when first Kohl’s then Macy’s slashed guidance following weak holiday spending, crushing the narrative of the “strong consumer.”
After this website repeatedly warned that the massive inventory buildup that helped boost Q3 GDP was unsustainable and woulre resulted in major liquidations and matched earnings reduction, today Macy’s confirmed just that when the giant retailer cut its 2018 guidance, saying the company will continue to take necessary steps in January to “ensure a clean inventory position”. As a result, Macy’s now sees adjsuted year EPS $3.95 to $4.00, down from $4.10 to $4.30 previously.
Macy’s also reported that November and December owned comp sales were up 0.7%, also missing expectations.
As a result of the sales miss and guidance cut, Macy’s shares imploded in early trading, dropping as much as 17% premarket. This is what 16 years of buy and hold… and make no profits looks like.
Macy’s wasn’t alone. Because shortly after Target reported ok number, Kohl’s defecated all over the bed and its shares plunged 8% after the company reported Nov. and Dec. holiday-period comp sales rose 1.2% on a shifted basis, much lower than its prior year holiday sales growth of 6.9% and falling short of Wall Street est. of +1.5%, cut from +~2% on Jan. 4.
The abysmal numbers from M and KSS dragged down the entire department sector space with J.C. Penney and Nordstrom also falling in pre-market trading, and even Target was down after earlier reported holiday comps. up 5.7%, stronger than expected, as suddenly the narrative of the strong US consumer is once again on the rocks.
In light of these disappointing spending numbers, it is almost as if the market not only leads the economy, but a sliding market crushes US consumer spending intentions.
Original source: http://feedproxy.google.com/~r/zerohedge/feed/~3/G5PXzISkplk/macys-plummets-17-after-cutting-guidance-retailers-tumble
