Macy's sees drop in third-quarter sales

US department store firm Macy's has cut its profit outlook for the year after a drop in sales in the third quarter.

Macy's net income for the period between August and October was $118m (£77m), down from $217m in the same period last year.

Shares in the company fell 14% following the news.

In a statement, Macy's chief executive Terry Lundgren said the company was "disappointed" that the pace of sales did not improve as much as expected.

Sales were hurt in part by the warm weather, which made it harder to sell winter clothing, and a strong dollar, which hurt tourist spending.

"Heading into the fourth quarter, we are shifting our organisation into overdrive to focus on sales-driving activities in the holiday shopping season," said Mr Lundgren.

The company now sees full-year earnings coming in at $4.20 to $4.30 per share, compared with an earlier guidance of $4.70 to $4.80.

Macy's has opened five discounted outlets in the New York area and plans to open a sixth before the end of the year.

The company, which also owns the department store Bloomingdale's, plans to open three new discount branches of that store too.

Macy's said it is also considering discounts at its stores to help move large quantities of inventory.

On a call with investors chief financial officer Karen Hoguet said "we will need to liquidate this inventory in the fourth quarter so that we can maintain the flow of fresh new merchandise."

Macy's has been cutting down on the number of standard priced stores that it owns for the last several years. Earlier this year it announced plans to close 35 to 40 stores in the US in early 2016.