American department store chain Macy’s Inc. (M) continues to see its shares fall Wednesday after dipping more than 8% on its reduced outlook for the current quarter.

Chief Financial Officer (CFO) Karen Hoguet told analysts Tuesday that the department store’s gross margins may come in below forecasts offered in February. (See also: Macy's and the Day Retail Died.)

Investors Fear Pressure Will Continue into Q2

With gross margins now expected to be 60 to 80 basis points below last year, Cincinnati-based Macy’s says it plans to offset the burden with increased cost savings.

In general, investors are receiving the warning as a sign that the intense pressure on American retailers in the recent period hasn't eased up in Q2. Macy’s industry peers such as J.C. Penney Co. Inc. (JCP) and Kohl’s Corp. (KSS) saw their stocks close down about 4% and 6% respectively following the announcement on Tuesday.

New CEO Lays Out ‘North Star Strategy’

Hoguet joined Macy’s newly instated Chief Executive Officer (CEO) Jeff Gennette in the department store chain’s first meeting with analysts in four years, just 10 weeks into Gennette’s tenure.

After working at Macy’s for 34 years, the new CEO says he has “tremendous faith” in the brand’s ability to strengthen its bond with customers, although admitting that it must “work hard” to “figure out all the answers.” Gennette further detailed a new “North Star Strategy” that outlines how the firm will evolve its marketing, merchandise, experience, interplay between stores and online, and innovation front deemed “what’s new, what’s next.” The North Star Strategy will reportedly involve a new loyalty program to roll out later in the year, a simplification of pricing and a reduction in duplicate items while the firm focuses on more trendy fashion over basic clothing.

As luxury retailers benefit from an increase in demand for premium products driven by Millennial trends and a solid stock market, Macy’s hopes to leverage its high-end brands such as Tommy Hilfiger and DKNY, along with private-label brands including I.N.C., Hotel Collection and Martha Stewart. In a move that will also boost margins, Gennette seeks to grow exclusive and private label brands to make up 40% of total revenue by 2020 compared to the current 29%. (See also: 2017: The Year of Retail Bankruptcies.)

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