The West Coast port strike and the bad winter weather slammed quarterly profit at Macy's. But its CEO voiced optimism about its outlook. Fred Katayama reports.
The disruptions in shipments at West Coast ports slammed sales and profit at Macy's. The strike at the ports delayed shipments, and that hurt inventory levels. Quarterly profit dropped nearly 14 percent on sales that ticked lower. Bad winter weather kept shoppers away, and foreign tourists spent less money at its flagship stores because of the strong dollar. But CEO Terry Lundgren said most of these issues were short term in nature and were largely behind them. He said the company is sticking to its profit and sales forecasts for the fiscal year. Macy's is boosting its dividend and its share buybacks. Lundgren voiced optimism, pointing to its success in selling dresses, its new private brand, Thalia Sodi, and its just-launched loyalty rewards program. Like its rivals, Macy's is expanding its beauty business. And it plans to launch its off-price store concept that will sell clearance goods at four locations this fall. Macy's shares, which are vastly underperforming the S&P 500 and the S&P retail index, fell in early trading.