NEW YORK — Macy’s is acknowledging that there will be no consumer splurge anytime soon.
A gloomy holiday shopping season across much of the retail spectrum has seeped into a spring funk. And after some startling numbers and projections from the Gap earlier this week and then Macy’s on Wednesday, investors had seen all they needed to see.
Shares tumbled across the sector with the bulk of retailers yet to report quarterly earnings.
Macy’s stock plunged 15 percent to levels not seen in four years.
Ralph Lauren, Nordstrom, J.C. Penney and Kohl’s are all reporting this week, followed by Sears, Target and Wal-Mart the next.
Macy’s Inc. slashed its profit and sales expectations for the year after a sales funk deepened during the spring. It reported its fifth straight decline for a key revenue measure, with the declines accelerating. Seven out of the past 10 quarters have now registered a decline in revenue at stores opened at least a year.
Against this backdrop, Macy’s announced it was accelerating initiatives to get shoppers excited. It announced plans to look for new ways to cut expenses and plow that money into more sales help at the stores and online. And it’s expanding its offerings on exclusive launches, including one backed by Sir Elton John and Lady Gaga.
“We are not counting on the consumer to spend more, so we are working harder to give customers more reasons to buy from us,” said Chairman and CEO Terry Lundgren in a company release.
But while analysts say that Macy’s woes are emblematic of the department store sector, they also put some of the blame on the retailer itself.
“The blunt truth is that Macy’s does not give consumers a reason to visit its stores,” said Neil Saunders, CEO of Conlumino, a research firm. “In many locations shops are simply not up to par; they are poorly merchandised, hard to shop, lack any inspiration, and have fairly mediocre customer service.”
Macy’s first-quarter income tumbled 40 percent and revenue fell 7.4 percent.
Macy’s report, which kicks off the first-quarter earnings season for major retailers, raises fresh concerns about the consumer and the health of stores, even after companies aggressively closed lower-performing locations. Macy’s recently shuttered 40 stores. The Cincinnati chain operates about 800 stores.
It had appeared retailers were recovering after a brutal holiday shopping season as sales accelerated earlier this year. That trend appeared to stall in mid-March.
