What: Shares of Macy's (NYSE:M) were down 13% as of 11:30 a.m. Wednesday after the company reported disappointing third-quarter results and reduced full-year 2015 guidance.

So what: Quarterly revenue fell 5.2% year over year to $5.874 billion, hurt by comparable-sales declines of 3.6% on an owned plus licensed basis. On an owned basis, Q3 comps fell 3.9%. That translated to a 45.6% decline in net income to $118 million, or $0.36 per share. On an adjusted basis -- which means excluding $111 million (or $0.20 per share) in asset impairment charges related to the impending early 2016 closure of 35 to 40 locations -- Macy's earnings per share were $0.56, down from $0.61 per share in the same year-ago period.

Analysts, on average, were looking for slightly lower adjusted earnings of $0.54 per share on significantly higher revenue of $6.09 billion.

"We are disappointed that the pace of sales did not improve in the third quarter, as we had expected," added Macy's CEO Terry Lundgren. "Spending by domestic customers remained tepid, especially in key apparel and accessory categories." Lundgren also noted sales continued to slow from international visitors in tourist centers, which represent "some of [Macy's] largest-volume and most profitable locations."

Consequently in the current quarter, Lundgren says Macy's is placing its focus on "sales-driving initiatives that we believe will begin yielding incremental results in the quarters and years ahead."

Also of note, Macy's described several "strategic real estate initiatives." First, after extensive review, Macy's has decided not to pursue the formation of a real estate investment trust to monetize is significant real estate assets, as its board deemed such a move "does not offer sufficient upside potential for value creation."

Rather, following the successful collaboration on Macy's Brooklyn store redevelopment project, Macy's is expanding its relationship with commercial real estate specialist Tishman Speyer to identify similar potential projects nationwide. Macy's is also exploring "joint ventures and other deal structures with third parties" to redevelop several of its flagship properties "in a manner than maintains a robust Macy's retail store presence while also bringing alternative use into those buildings."

Now what: Nonetheless, Macy's now expects 2015 earnings per diluted share of $4.20 to $4.30, a reduction of $0.50 per share from both ends of its previous range. That assumes earnings per diluted share in the fourth quarter of $2.54 to $2.64, excluding incremental charges related to cost reductions and store closings. Analysts, on average, were modeling fourth-quarter and full-year earnings per share of $2.90 and $4.65, respectively.

For now, it's clear that Macy's has plenty of work to do if it wants to get its business back on track for sustainable, profitable growth. Given Macy's top-line shortfall in Q3 and freshly reduced 2015 earnings outlook, I'm content watching Macy's progress from the sidelines until we see signs its growth-driving initiatives are bearing fruit.

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