Macy’s will close 150 stores, 50 this year it said Tuesday, after posting a fourth quarter loss and declining sales.

While adjusted net income and revenue topped Wall Street expectations, the company offered a muted outlook for the year. Shares slipped 2% before the opening bell.

The department store chain faces a proxy fight from Arkhouse Management which nominated a slate of nine director for election to Macy’s board last week. Last month, Macy’s rejected a $5.8 billion takeover offer from the hedge fund and Brigade Capital Management, an investment manager.

Activist investors and pressure to increase sales are just two critical issues facing new CEO Tony Spring, who succeeded Jeff Gennette last month.

Even before the pandemic, department stores were facing intense competition from online rivals. Neiman Marcus and JCPenney both filed for Chapter 11 bankruptcy protection.

Consumers have proven resilient and willing to shop even after a bout of inflation, though behaviors have shifted, with some Americans trading down to lower priced goods.

Macy’s, which also runs upscale Bloomingdale’s stores as well as Bluemercury beauty stores, is maneuvering to shore up sales by accelerating the expansion of small-format stores that can provide more convenience to its customers. It announced plans in October to add up to 30 small-format locations through the fall of 2025, bringing the total number to roughly 42. The next round of expansion starts in the fall.

Yet Macy’s is still cutting jobs to bring down its costs. In January, Macy’s said it would trim about 3.5% of its total workforce, roughly 2,350 employees, and the iconic department store is closing five locations.

Arkhouse and Brigade offered $21 for each of the remaining shares in Macy’s they don’t already own. Macy’s said it had had concerns about the financing plan and the value of the offer.

Last week, Macy said that it was seeking additional financing information from Arkhouse and Brigade to potentially advance talks with its board. Rather than providing that additional information, Macy’s said Arkhouse sought to extend its director nomination window by 10 days.

Macy’s posted net income loss of $71 million or a loss of 26 cents per share, for the quarter. That compares with a profit of $508 million, or $1.83 per share, in the year-ago period. Adjusted earnings were $2.45 per share. Analysts were expecting $1.98 per share, according to FactSet estimates.

The company posted sales of $8.12 billion, down nearly 2% from $8.26 billion a year ago. Analyst were expecting $8.09 billion.

Online sales decreased 4% compared with the year-ago period, while sales at its physical stores were roughly flat from the year-ago period.

Comparable sales, which included sales at stores and its digital channels opened at least a year were down 5.4% during the latest quarter.

The company expects profit for the current fiscal year to be in the range of $2.45 per share to $2.85 per share, while sales should range from $22.2 billion to $22.9 billion.

Analysts were expecting a profit of $2.77 per share on sales of $22.81 for the year.

(AP)