A glum outlook from Macy’s Inc. renewed concerns about the broader industry, sending shares of retailers and apparel makers tumbling on Wednesday.
Macy’s cut its profit forecast for this year and posted first-quarter revenue that missed analysts’ estimates — a sign that slow foot traffic at shopping malls continues to take a toll on the largest U.S. department-store company.
Shares of Macy’s plunged as much as 13 percent to $32.34 in New York, their worst intraday decline in six months. And it wasn’t alone. Wal-Mart Stores Inc., the largest U.S. retailer, slid as much as 4.6 percent to $65.66. Target Corp. fell as much as 5 percent to $76.01, its biggest intraday drop since November.
Companies that stock retailers with goods also got hit. Nike Inc. tumbled as much as 3.4 percent. VF Corp., owner of the North Face, Lee and Wrangler clothing brands, dropped as much as 5 percent.
Gap Inc., the largest specialty chain focused on apparel, also reported weak results this week. It posted a 7 percent decline in Gap’s same-store sales last quarter. Analysts had predicted a gain of 1.1 percent, according to RetailMetrics.
Gap’s evaporating sales may force the retailer to rely more heavily on real estate deals and other cost-cutting moves to maintain profit, said Fitch Ratings, which cut its long-term issuer default rating to junk status on Wednesday.
Macy’s now expects full-year earnings of $3.15 to $3.40 a share, down from an earlier projection of $3.80 to $3.90 a share. The Cincinnati-based company also cut its forecast for full-year sales, citing a double-digit drop in tourist spending and a slowdown in sales of some core categories.