Macy’s Inc. (NYSE: M) is likely in more trouble than expected this holiday season. It remains primarily a brick-and-mortar retailer. New analysis shows that traffic to stores on Black Friday dropped more than 50% across America. If Macy’s posts numbers anywhere close to that, it will have taken a massive hit.
Sensormatic Solutions, part of Johnson Controls, released data on Black Friday store activity. “Findings indicate that shopper visits resulted in a 52.1% decline in traffic on Black Friday, November 27, compared to 2019.” The figure was a drop from the November 22 to November 27 period, when traffic dropped 45.2%.
Without question, Macy’s has moved into e-commerce, and its stock has benefited from a dose of optimism. It has risen 78% in the past month. However, the shares are down 36% so far this year. And there is every reason for the drop. Revenue in the most recent quarter was $4 billion, down from $5.2 billion in the same period the year before. Comparable store sales dropped 21% compared to 2019.
The good news was “Digital sales grew 27% over third quarter 2019. Digital sales penetrated at 38% of total owned comparable sales.” Good, but not nearly enough.
Macy’s cannot reverse the tide of a problem that has vexed and will vex most of the brick-and-mortar businesses. Its situation is bound to weaken as the year progresses, and it could end the year worse off than it was at the end of the third quarter.
24/7 Wall St.
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