(Adds details, Kohl’s results, updates shares)
May 11 (Reuters) - Department store operator Macy’s Inc reported a lower-than-expected quarterly profit, as sales continued to tumble and as higher inventory weighed on margins, and the company’s shares dropped 9 percent in premarket trading on Thursday.
Sales at Macy’s stores open at least a year, including sales in departments licensed to third parties, fell 4.6 percent in the first quarter.
That was steeper than the 3.5 percent drop expected by analysts polled by research firm Consensus Metrix.
Macy’s merchandise inventories were up 4.2 percent in the quarter, pressuring margins.
In contrast, a leaner inventory and lower costs helped rival Kohl’s Corp report a better-than-expected quarterly profit earlier on Thursday.
However, Kohl’s shares were also down 2.6 percent in premarket trading, as its sales and comparable-store sales also fell more than expected.
Kohl‘s, Macy’s and rivals such as J.C. Penney Co Inc are struggling with declining mall traffic and tough online competition, and are trying to cope by cutting costs through store closures, selling or leasing their real estate and keeping inventory levels low.
Net income attributable to Macy’s shareholders fell to $71 million, or 23 cents per share, in the quarter ended April 29, from $116 million, or 37 cents per share, a year earlier.
Excluding items, the company earned 24 cents per share, well below the 35 cents analysts on average had expected, according to Thomson Reuters I/B/E/S.
Net sales fell 7.5 percent to $5.34 billion, falling for the ninth straight quarter and missing the average analyst estimate of $5.47 billion. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Savio D‘Souza)