Macy’s pointed to gains from an operating investment strategy starting with its top 50 stores in beating Wall Street estimates on first-quarter sales and revenues despite declines in both metrics.
Net income was $62 million, or 22 cents per diluted share, versus $155 million, or 56 cents per diluted share, in the year-before quarter, the company stated. Adjusted for one-time events, net income was $77 million, or 27 cents per diluted share, versus $157 million, or 56 cents per diluted share, in the year-previous period.
A Yahoo Finance-published analyst consensus estimate called for earnings per adjusted diluted share of 15 cents and revenues of $4.86 billion.
In the quarter, year over year, comparable sales were down 1.2% on an owned basis and 0.3% on an owned-plus-licensed-plus-marketplace basis, while comps at go-forward locations and digital were down 0.9% on an owned basis and up 0.1% on an owned-plus-licensed-plus-marketplace basis.
Macy’s has slated 350 namesake stores to go forward in operation as it closes 150. It further has taken 50 of the 350 stores, dubbed First 50, and made initial planned operational investments.
Macy’s banner comps were down 1.6% on an owned basis and 0.4% on an owned-plus-licensed-plus-marketplace basis. Comps at go-forward locations and digital were down 1.3% on an owned basis and flat on an owned-plus-licensed-plus-marketplace basis. Comps at First 50 locations increased by 3.3% on an owned basis and 3.4% on an owned-plus-licensed basis, the company asserted. Bloomingdale’s comps advanced 0.8% on an owned basis and 0.3% on an owned-plus-licensed-plus-marketplace basis. Bluemercury comparable sales were up 4.3%
Net sales were $4.85 billion, while total revenue was $5 billion versus $4.98 billion and $5.17 billion, respectively, in the year-earlier quarter. Operating income was $125 million versus $244 million in the year-prior period.
In a conference call, Macy’s noted it likely would discount more in the upcoming months in reaction to inflationary pressure on the consumer. The company also plans to reinvest in its own brands.
In the conference call, Tony Spring, chairman and chief executive officer of Macy’s, Inc. said investments are gaining traction and should lead to sustainable earnings growth. In the top 50 stores, Macy’s is using technology to ensure that customer experience improves, including having employees in the right places when needed. At the same time, the company will look at assortment and make decisions about what it will keep carrying to maximize the available sale opportunities.
In announcing the financial results, Spring said, “We are encouraged by our customers’ response to our Bold New Chapter strategy resulting in sales near the high end of our outlook. Our teams executed with discipline and efficiency, which contributed to first quarter earnings that exceeded our expectations. At the Macy’s nameplate, go-forward business performance was led by our First 50 locations, which achieved comparable sales growth year over year and are a leading indicator for our go-forward fleet. Although early days, our investments in product, presentation and experience are gaining traction and reinforce our belief that longer-term, Macy’s, Inc. can return to sustainable, profitable growth.”
