Macy’s shares tumble to lows unseen in over five years on Tuesday, as CFO Hoguet warns on gross margins

At an investor meeting on June 6th, Macy’s Chief Financial Officer Karen Hoguet said that the gross margin could be 60 to 80 basis points lower in 2017 compared to a year ago, which led to a steep retreat to a five-year trough of the companys stock and mounted selling pressure on other retail shares as well.

Macy’s shares registered their largest daily loss since May 11th during the trading session on Tuesday. The stock went down 8.21% ($1.96) to $21.90, after touching an intraday low of $21.86, or a price level not seen since February 3rd 2011 ($21.69). In the week ended on June 4th the shares of the department store chain added 1.58% to their market value compared to a week ago, which marked a second consecutive period of gains. However, the stock has neutralized earlier gains and is now down 6.81% so far during the current month, following a 19.58% slump in May. The latter has been a third consecutive monthly drop and also the steepest one since November 2015. For the entire past year, the shares of Macy’s Inc gained 2.37%.

According to Hoguet, Macys second-quarter gross margin could be 100 basis points lower compared to the same period a year earlier.

The companys margin was 39.4% during the fiscal year ended on January 28th and 40.9% during the second quarter of fiscal year 2016.

Last month the department store chain said that lower first-quarter gross margin had resulted from higher-than-projected inventory levels as of the end of 2016.

“I think this is proof that while Macys talks a good game, on the ground very little has changed in stores”, Neil Saunders, managing director of GlobalData Retail, said, cited by Reuters. “It isnt really a surprise but it is slightly disappointing because the company has been doing some things to try and turn itself around.”

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Macy’s Inc’s stock price, have a median target of $27.50, with a high estimate of $36.00 and a low estimate of $23.00. The median estimate is a 25.57% surge compared to the closing price of $21.90 on June 6th.

The same media also reported that 20 out of 24 surveyed investment analysts had rated Macy’s Inc’s stock as “Hold”, while 3 – as “Buy”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Macy’s stock are presented as follows:

R1 – $22.13
R2 – $22.37
R3 (Range Resistance – Sell) – $22.60
R4 (Long Breakout) – $23.31
R5 (Breakout Target 1) – $24.13
R6 (Breakout Target 2) – $24.46

S1 – $21.67
S2 – $21.43
S3 (Range Support – Buy) – $21.20
S4 (Short Breakout) – $20.49
S5 (Breakout Target 1) – $19.67
S6 (Breakout Target 2) – $19.34

By using the traditional method of calculation, the weekly levels of importance for Macy’s Inc (M) are presented as follows:

Central Pivot Point – $23.83
R1 – $24.54
R2 – $25.28
R3 – $25.99
R4 – $26.71

S1 – $23.09
S2 – $22.38
S3 – $21.64
S4 – $20.91