People shop during a Black Friday sales event at Macy’s department store in Manhasset, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton
(Reuters) – Macy’s Inc said on Tuesday it would cut 100 senior management positions as the department store operator seeks to cut costs and improve profitability after reporting bleak holiday sales.
The company said it expects the move to yield annual savings of $100 million, starting fiscal 2019.
“The steps… will allow us to move faster, reduce costs and be more responsive to changing customer expectations … These actions impact colleagues who have made strong contributions to the company over the years,” Chief Executive Officer Jeff Gennette said.
The company said it plans to improve productivity by introducing initiatives to grow margin through efficient management of its inventories and supply chain, while investing in categories where the company already has strong market share such as dresses, fine jewelry, men’s tailored, women’s shoes and beauty.
The streamlining of its senior management would involve eliminating about 100 vice president or higher-level positions.
The company now forecasts adjusted profits for fiscal 2019 between $3.05 to $3.25 per share, below analysts estimates of $3.29.
Macy’s also reported a smaller-than-expected 0.7 percent rise in holiday quarter same-store sales on Tuesday, which were also below the company’s own expectations.
The restructuring efforts comes a month after Macy’s tempered expectations for the holiday season by slashing its fiscal 2018 revenue and profit forecast on weak demand for women’s sportswear, seasonal sleepwear, fashion jewelry, fashion watches and cosmetics.
On Tuesday, Macy’s posted better-than-expected adjusted profit during the fourth quarter. Shares of the company were trading up about 2 percent at $24.88 in morning trading.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shailesh Kuber