Macy's stock tumbled Wednesday after the retailer reported lower-than-expected third-quarter results and warned on full-year earnings.
In the first hour of trading, its share price sank more than 12 percent, putting it on track for its worst day since Jan. 20, 2009. when it lost 10.55 percent. (Get the latest quote here.)
Saying the company had a "tough quarter," Chairman and CEO Terry Lundgren highlighted a series of factors, including a slowdown in visits by international tourists who frequent many big-city Macy's locations, and warmer weather in the Northeast that's curtailing sales of winter apparel.
The department store operator also said it's not pursuing the formation of a real estate investment trust at this time, but was exploring redevelopment of some flagship properties through joint ventures or other deals.
What's bad news for the department store chain was good news for shoppers, Lundgren told CNBC's "Squawk Box."
"We're going to take markdowns," he said. "Consumers are going to have a field day, because we're going to have lots of values out there," he added. "But we're going to get rid of the inventory — have to do that before Christmas."
He added: "Eventually you run out of days to sell through the inventory, because December 27th comes and volume just drops off precipitously."
Retail analyst Dana Telsey told "Squawk Box" in a separate interview: "It's a margin hit for the fourth quarter."
The retailer posted third-quarter adjusted earnings of 56 cents per share, down from 61 cents a year ago. Revenue fell to $5.87 billion from $6.20 billion in 2014, the third-straight quarter of declining sales.
Analysts had expected the retailer to post earnings per share of 54 cents on revenue of $6.09 billion, according to Thomson Reuters.
Macy's also cut its 2015 adjusted earnings per share guidance to $4.20 to $4.30.
Lundgren said consumers were not buying in Macy's categories, even though they were fueling strong sales in autos, home improvement and technology.
Telsey, founder and CEO of Telsey Advisory Group, said, "Overall [in] the whole apparel category and the accessory category, we've seen slowdowns in growth rates."
Macy's same-store sales fell 3.6 percent in the third quarter, the third-straight quarter of decline. Analysts on average had expected 0.2 percent growth, according to research firm Consensus Metrix.
U.S. customers have cut back their discretionary spending, choosing instead to pay back loans and spend on eating out, the retailer said.
Net income attributable to shareholders fell 45.6 percent to $118 million, or 36 cents per share, in the quarter ended Oct. 31, partly due to an impairment charge of $111 million related to closure of some stores.
Shares of the retail giant have taken a tumble this year, falling over 25 percent year to date. Meanwhile, rival retailer J.C. Penney has gained over 30 percent in the period.
Separately, Macy's announced Wednesday an agreement to open LensCrafters locations in as many as 500 of its department stores in the U.S. over the next three years.
The first LensCrafters shop in a Macy's is set to open in April.
The deal builds on a relationship between Macy's and Luxottica Group, owner of LensCrafters and Sunglass Hut. To date, about 670 Sunglass Hut locations operate within Macy's stores.
— Reuters contributed to this report.