Department store Macy’s saw its same-store sales decline by more than 20 percent in Q3, with consumers scaling back their spending on clothing and accessories during the pandemic.
“COVID is surging again across the country,” said Macy’s CEO Jeff Gennette on a post-earnings call with analysts.
“And that continues to impede our recovery.”
The earnings results suggest that the retailer is likely to see a less than stellar holiday season. According to CNBC, the company expects same-store sales of owned and licensed stores to decline by up to 25 percent during the fall season.
In Q3, the company reported a net loss of $91 million, with sales declining to $3.99 billion, down from $5.17 billion a year before. The company managed to narrowly beat analysts’ expectations of $3.86 billion.
Much like other retailers, the company has enjoyed growth in digital sales, but its digital growth is now seemingly slowing down. Macy’s reportedly saw its digital sales grow by 27 percent in Q3, which was down from more than 50 percent in Q2. Unfortunately, these gains have not been enough to offset the losses stemming from its brick and mortar business.
“We’re going to continue to grow very robustly [online], with double-digit growth,” Gennette said. “But I do expect that it continues to taper off, as our stores come online and get stronger.”
The company is preparing to turnaround its business and boost sales by investing in its off-price business and shutting down less profitable stores. Still, it is likely to face significant headwind as retailers such as Target and Walmart are expanding their apparel and beauty business and fewer consumers are expected to visit mall locations during the holiday season.