Macy’s, the largest US department store chain, has reported dismal third-quarter earnings and slashed its 2015 profit forecast, citing slumping sales ahead of the holiday shopping season.

Shares in Macy’s plummeted more than 15 per cent to $US39.88 around 1845 GMT on Wednesday (0545 AEDT Thursday) after reporting sales fell 5.2 per cent in the July-September quarter from a year ago to $US5.87 billion ($A8.32 billion), well below market expectations of $US6.09 billion.

The company blamed especially weak spending by US customers in key apparel and accessory categories and a downturn in international tourism amid a strong US dollar.

“We are disappointed that the pace of sales did not improve in the third quarter, as we had expected,” said Terry Lundgren, chairman and chief executive of Macy’s, in a statement.

Predicting lower sales in the fourth quarter, the company cut its full-year earnings forecast by 10.6 per cent.

Macy’s, the iconic American retailer whose flagship store on 34th Street in New York City is the finish of the annual Macy’s Thanksgiving Day Parade, said it was beefing up its digital and mobile strength to meet the increasing consumer shift to online shopping.

The company, which also owns the upscale Bloomingdale’s chain, has been under a restructuring and downsizing plan in the past year. It previously announced it would close between 35 to 40 stores in early 2016, among about 800 in the US.

Macy’s also announced on Wednesday that it had decided not to pursue a spin-off of real estate holdings into an independent real estate investment trust because it “does not offer sufficient upside potential for value creation”.

Other apparel retailers appeared to feel the heat from Macy’s woes.

Shares in Gap, whose sales in its namesake and Banana Republic brand stores fell in October, extended their losses from Tuesday when the company offered a downbeat outlook on the quarter ended November 1. Gap slipped 1.8 per cent.

Struggling fashion chain Abercrombie & Fitch tumbled 4.9 per cent, Michael Kors dropped 3.3 per cent and Ralph Lauren lost 5.2 per cent.

AFP

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