The largest U.S. apparel retailer reports disappointing Q2 numbers and cuts its outlook. Analyst calls quarter ''flat out horrible.'' Jeanne Yurman reports.
Ahead of the bell Macy's Q2 fell well short of Wall Street targets - its top and bottom line missing Wall Street targets. And the retailer dialed back its full year guidance. Second quarter sales were $6.1 billion - down more than two and a half percent from last year. Specific to Macy's: the end of its Friends & Family promotional event and markdowns related to the port slowdown in California were issues. More broadly, a strong dollar hurt spending by tourists and Macy's says consumer demand overall has been restrained. Given weaker-than-expected sales performance in the first half, Macy's is ratcheting down its growth outlook for comparable sales. Previously it predicted two percent growth which it now expects will be flat for 2015. Brian Mc Gough, Managing Director at Hedgeye Risk Management didn't mince words on his take on the report saying: "Absolutely nothing redeeming about this quarter...this was flat-out horrible...If anyone doubts that we're at the tail end of an economic cycle, they're fooling themselves." Aside from the sour earnings news, Macy's announced two new initiatives: it plans to test out e-ecommerce in China on Alibaba's Tmall Global site later this year. And throwing a bone to activist investors who have been hounding the company to monetize its real estate holdings, it's looking to redevelop its Downtown Brooklyn store.