Macy's Inc. (M - Get Report) posted sharply weaker-than-expected second quarter earnings Wednesday, and rimmed its full-year profit guidance, as inventory clearance and markdown moves ate into its bottom line.

Macy's said diluted earnings for the three months ending in July came in at 28 cents per share, down 47.2% from the same period last year and well shy of the Street consensus forecast of 45 cents per share. Group revenues held up well, however, and were largely flat to last year, and in-line with analysts' estimates, at $5.546 billion.

Looking into 2019, Macy's said it now sees diluted earnings in the region of $2.85 to $3.05 per share, down from a prior forecast of $3.05 to $3.25 per share. However, Macy's also said it still sees full year sales flat to 2018.

"We had a slow start to the quarter and finished below our expectations. Rising inventory levels became a challenge based on a combination of factors: a fashion miss in our key women's sportswear private brands, slow sell-through of warm weather apparel and the accelerated decline in international tourism," said CEO Jeff Gennette. "We took markdowns to clear the excess Spring inventory and are entering the Fall season with the right inventory to meet anticipated customer demand." 

"Our 2019 strategic initiatives are on track to contribute to sales growth in the back half of the year, and we have plans to drive productivity and improve gross margins," Gennette added. "Our team has responded quickly to the external environment, course corrected when needed and we remain confident"

Macy's shares were marked 16.06% lower following the earnings release to change hands at $16.26 each by mid-morning Wednesday , near the lowest level in ten years and a move that would extend the stock's year-to-date decline to just under 46%.