LOS ANGELES (CBSLA/AP) – Retail giant Macy’s announced Thursday it will be closing two more stores in Los Angeles and Orange counties as it continues to struggle with declining sales.
In its 2017 third-quarter earnings report, Macy’s said it will be closing its stores at the Laguna Hills Mall and the Westside Pavilion in West L.A. in early 2018. An exact date was not specified.
Earlier this year, Macy’s cut 10,000 jobs and closed 68 stores nationwide, including one in Simi Valley. On Thursday, Macy’s reported that its third-quarter earnings more than doubled as a result of those actions. It’s been expanding into off-price stores and launched a loyalty program last month that it hopes will attract more shoppers.
Still, revenue at stores that have been open at least a year fell for the eleventh straight quarter. The drop of 4 percent was worse than the 2.9 percent analysts expected.
Meanwhile, Kohl’s Thursday also reported a drop in quarterly profits, underscoring just how challenging the holiday shopping season will be for department store chains. Like many retailers, Macy’s and Kohl’s have wrestled with weak sales as customers go online. Department stores, which are heavily dependent on clothing sales, are seeing more competition there as Amazon expands further into fashion.
It’s been a tough year for retail overall, with store closings on pace to top the worst year of the recession and several well-known chains filing for bankruptcy protection because of their debts. Mall shopping is down, and that hits department store chains particularly hard. So the holiday season, always important, is even more critical.
Stores are planning early holiday promotions and some are opening earlier on Thanksgiving than last year to try to scoop up some traffic. Most Macy’s stores will open at 5 p.m. local time on Thanksgiving and close at 2 a.m., similar to last year. They will reopen 6 a.m. local time on Black Friday. Macy’s is increasing the number of temporary workers it’s hiring for distribution and warehouses for the holiday season as it chases fast-growing e-commerce sales.
Analyst Neil Saunders, managing director of managing director of GlobalData Retail, criticized Macy’s for “the patchiness of its turnaround program.”
“While there is no doubt that the company has made progress across some areas, change is far from comprehensive or far-reaching,” he wrote. “We get the sense that Macy’s fixes issues in a piecemeal way and that it lacks a unified vision for the future of the business.”
Macy’s earned $36 million, or 12 cents per share, in the third quarter. Earnings adjusted for one-time gains and costs, were 23 cents per share. The results topped Wall Street expectations, but the bar was set low. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 19 cents per share.
The Cincinnati-based department store operator posted revenue of $5.28 billion in the period, which missed Street forecasts.
Macy’s shares rose nearly 4 percent, or 62 cents, to $18.19 in early trading on Thursday. Kohl’s shares rose nearly 8 percent, or $3.19, to $37.60.
(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)