Covered in Opening Bell, the unseasonably seasonable May this year has retailers and companies in any other struggling industry scrambling to find excuses for lagging performance. Macy's, with same store sales off 3.3% from last year and 1.9% off analyst estimates, hedged its bet on an unseasonable May by acquiring a crappy department store chain with the same name, so it could blame May no matter what happened.
In fact, Macy's has been blaming May Department stores, which it acquired in August of 2005, every month for struggling sales, claiming that it tried to "reduce discounts" at May chains too quickly (or people in the Midwest will not fork over $300 for a stainless Norman Rockwell print pashmina juicer). Macy's has come in with same store sales below guidance estimates for the past four months.
If you want to hear corp-speak for "although our performance sucked balls in May, there are many other months in a calendar year in which we could potentially loosen our lips-first grip on the giant balls of bad retail performance we are currently sucking," here is Macy's official response, from the New York Post:
"While we were disappointed with sales in the month of May, the increased promotional marketing support currently being implemented for the Macy's brand is expected to improve sales trends in June and July. You know what they say, May flowers bring June allergies, but fortunately our business plan is the Claritin of the retail allergy season, even though the aforementioned flowers of May never quite bloomed for us. If I stick with the metaphor long enough I plan on at least lulling you to the point where I don't have to present any actual numbers." said Terry Lundgren, Macy's chief executive officer.
Of course, Macy's expects June sales to be down 2% from last year.
Investors are in a tizzy, as they keep trying to sue Macy's for concealing problems with May integration, thereby inflating the company's stock price. Macy's shares dropped 3% yesterday. Macy's is up 13% since the May acquisition in August 2005, but that is considerably less than several industry peers of the department store chain over the same period.
MACY'S SLUMPS [New York Post]