Macy’s Gains on CEO Reassurance, Plan to Close 29 Stores

(Bloomberg) -- Macy’s Inc., under scrutiny as department stores struggle to adapt to changes in the way consumers shop, rose to the highest stock level in almost five months on Wednesday after Chief Executive Officer Jeff Gennette said the retailer’s performance is improving.

Macy’s also said it will close 28 namesake stores and one Bloomingdale’s in the coming weeks, while reducing some headcount at Bloomingdale’s.

Same-store sales, a key metric of retailers’ success, fell 0.6% in November and December at company-owned and licensed stores from a year earlier. Gennette said the holiday sales “reflected a strong trend improvement from the third quarter.”

Macy’s surged as much as 5.1% to $18.57 in New York trading before paring gains, and traded up 1.1% as of 10:18 a.m. The rise suggests investors were expecting worse comparable sales in the holiday shopping season after Macy’s reported a sharp decline in the third quarter that ended early November.

The decline in November-December sales “is nowhere near as bad as it could have been and represents a marked improvement from the dismal third quarter when comparable sales declined by 3.9%,” Neil Saunders, managing director of GlobalData Retail, said in emailed comments.

Even after the increase, the shares are trading below their levels in early August, before the retailer lowered its profit outlook and send the shares plunging.

Macy’s is the first big U.S. retailer to provide some comments and data on its holiday shopping season -- which generates about a fifth of retailers’ revenue each year in the U.S., according to the National Retail Federation. Early reports from groups that monitor such sales, including Mastercard Spending Pulse, suggested that shopping picked up this year, driven by online purchases.

Macy’s said it will hold a meeting with investors on Feb. 5 in New York, where it will release a three-year strategy.

The company, which had the second-worst performing stock in the S&P 500 last year, has been closing underperforming stores amid working to reduce superfluous inventory for several years. The shares fell 43% last year.

--With assistance from Lisa Wolfson.

To contact the reporters on this story: Jordyn Holman in New York at jholman19@bloomberg.net;Jonathan Roeder in Chicago at jroeder@bloomberg.net

To contact the editors responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net, Cécile Daurat, Jonathan Roeder

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