Macy’s beat a second-quarter Wall Street earnings estimate, but comparable sales slipped as the company prepares for the upcoming holidays by fortifying its home product assortment.
Net income was $150 million, or 53 cents per diluted share, versus a net loss of $22 million, or eight cents per diluted share, in the year-earlier quarter, Macy’s reported Adjusted for one-time events, net income was $149 million, or 53 cents per diluted share, versus 71 million, or 26 cents per diluted share, in the year-prior period.
A Yahoo Finance-published analyst consensus estimate called for earnings per adjusted diluted share of 30 cents and revenues of $5.12 billion.
Comparable sales at Macy’s in the quarter declined by 4% year over year on an owned-store basis and 3.3% on an owned-plus-licensed-plus-marketplace basis year over year, the company stated. Macy’s banner comps decreased 4.5% on an owned basis and 3.6%, on an owned-plus-licensed-plus-marketplace basis year over year, while Bloomingdale’s comps slipped 1.1% on an owned and 1.4% on an owned-plus-licensed-plus-marketplace basis. Bluemercury comps gained 2% on an owned basis.
Net sales were $4.94 billion and total revenue was $5.1 billion versus $5.13 billion and $5.28 billion, respectively, in the year-previous quarter. Operating income was $222 million versus $124 million in the year-before period
In a conference call, Tony Spring, Macy’s chairman and CEO, said the “First 50” stores revamped by the company under its “Bold New Chapter” strategy posted a 1% comp gain in the quarter. However, he said consumer discretionary spending didn’t live up to expectations. The company took steps to drive profitable sales in the period, including targeted messaging, which helped lift adjusted earnings per share, the company reported. Home sales have been soft at Macy’s stores, but the company is augmenting its gifting assortment in the category for the holidays and preparing for a broad private-brand initiative in 2025. As part of its effort to close underperforming stores, Macy’s indicated it will shut about 55 namesake locations this year, five more than previously planned.
In announcing the first quarter results, Spring said, “During the second quarter, we delivered strong earnings performance in a challenging consumer environment. Our colleagues executed with discipline, supporting gross margin expansion and effective expense control throughout the organization. We are seeing signs of our strategy taking root, including two consecutive quarters of positive comparable sales in Macy’s First 50 locations. We are encouraged by the early traction of our Bold New Chapter and remain committed to returning Macy’s, Inc. to sustainable profitable growth.”
