Macy’s (NYSE:M) stock was down 3.57% in early afternoon trading on August 23. Shares have plunged 45% in 2019 so far. The release of its second quarter results precipitated a nearly 30% drop over the past month.
The company issued a profit warning after the release of its Q2 earnings. It has been forced to dump merchandise at significant discounts which has drawn the concern of analysts.
The so-called "retail apocalypse" in the United States has already claimed more than 8,000 future store closings from a plethora of retailers in 2019. Retailers did get some good news in August as the White House decided to delay its tariffs on Chinese imports.
Net income slipped by more than half from Q2 2018. Adjusted net income fell to $88 million from $219 million in the previous year. It posted a small comparable sales growth of 0.2% on an owned basis.
Macy’s drew attention to poor weather in May, and the drop in U.S. tourism as reasons for its slow quarter. This quarter dropped Macy’s to one of the five worst performing stocks on the S&P 500, raising serious questions about its viability going forward.
Macy’s latest profit warning did not take new tariffs into account, so we could be looking at a worse outlook as the trade war heats up. Macy’s stock looks dirt cheap at a glance, with a P/E ratio of 5 and a P/E of 0.7.
The stock had an RSI of 17 at the time of this writing, putting it deep in technically oversold territory. Still, macro trends and internal struggles keep me from considering Macy’s a bargain buy today.
