Macy's third quarter sales impacted by US dollar strength

Heading into the make-or-break holiday season, Macy’s, the operator of the iconic US department stores that go by the same name, announced lower than expected third quarter sales in part due to the stronger US dollar.

The largest chain of department stores in the US said sales dropped 5% over the three months to September to reach $5.87bn, which was shy of analysts’ forecasts for $6.1bn.

Earnings per share for the period printed at 56 US cents if extraordinary charges are excluded, two cents above the average forecast from the number crunchers on Wall Street.

The company blamed its poor showing on still “tepid” spending by domestic customers and a “significant” slowdown in buying by international customers at the major tourist centres, presumably as a result of a stronger US dollar.

In a bid to shore up flagging sales the firm was to ramp-up its off-price store format, Macy’s Backstage, which was launched in the fall.

That led management to mark down its guidance for 2015 earnings per share to between $4.20 and $4.30, with like-for-likes expected to drop between 1.8% and 2.2%.

Total sales were now seen falling between 2.7% to 3.1%, versus a previous forecast that they would see a dip of approximately 1%.

As of 15:26 shares in Macy’s were down 13.46% to hit $40.57.