Macy's

The stock price of Macy’s (NYSE:M) plummeted more than 5% to $64.08 per share after reporting second quarter earnings that missed the estimates of Wall Street analysts.

Macy’s generated earnings of $0.65 per diluted share in the second quarter, lower than its earnings of $0.80 per share in the same period last year. Zacks Equity Research analysts expected the company to report $0.75 in earnings per share.

The company’s revenue declined from $6.26 billion to $6.10 billion during the period.

“We are disappointed in our second quarter results, which were impacted by a variety of factors, both internal to the company and in the macroeconomic environment. We expect an improvement in trend beginning in the second half of 2015 based on a range of promising new strategic initiatives,” said Macy’s Chairman and CEO Terry Lundgren.

Macy’ said it is aggressively positioning itself for sales growth over the short and long-term by implementing different strategies. The company started its e-commerce selling in China, piloted the initial six Macy’s Backstage off-price stores in New York City, and accelerating its online business through omni channel buying and planning of merchandise etc.

Why Macy’s missed earnings

In an interview on CNBC, Lundgren explained why Macy’s failed to meet the earnings expectations of Wall Street analyst. According to him, consumers did not shop in its categories and the strong dollar is negatively impacted its performance.

“Clearly — I have mentioned this before that — the European, the Chinese tourists, the Brazilian tourists around the world, they’re just not coming to America and the strength of the dollar is impacting that. And when they are here they are not spending in our category, it’s as simple as that,” explained Lundgren.

Macy’s joint venture with Fung Retailing

Separately, Macy’s announced that it is exploring the retail environment in China through a free-standing joint venture with Fung Retailing Limited, a privately-held enterprise based in Hon Kong.

Macy’s owns 65% in the joint venture while Fung Retailing holds the remaining 35%. The joint venture will begin with an e-commerce pilot and it is expected to significantly learn about new customer preferences and buying patterns in China.

Macy’s plans to start selling in China through T-mall Global, a business to consumer platform owned by Alibaba Group Holding (NYSE:BABA).  The joint venture will be called Macy’s China Limited and will be based in Hong-Kong.