Macy's Sales Take a Positive Turn -- WSJ
17 Maggio 2018 - 9:02AM
Dow Jones News
By Suzanne Kapner and Allison Prang
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 17, 2018).
After closing dozens of stores, Macy's Inc. reported higher
sales at locations still open amid signs that the department-store
giant is pulling out of a prolonged slump.
The results were buoyed by a strong economy, with low
unemployment and recent tax cuts that should give consumers more
money to spend. They bode well for other retailers scheduled to
report earnings this week, including Walmart Inc., J.C. Penney Co.
and Nordstrom Inc.
"The customer is feeling confident, and is out there ready to
spend," said Macy's Chief Executive Jeff Gennette.
Macy's said same-store sales rose 3.9% compared with the same
quarter the year before, and 4.2%, including licensed departments.
A big driver of the sales increase was a promotional event that
shifted into this year's first quarter, compared with last year,
when it occurred during the second quarter. Stripping out this
event, same-store sales on an owned-plus-licensed basis would have
risen 1.7%, according to the company.
But Macy's is also taking internal steps that are boosting
performance, including a streamlined merchandising structure and a
new incentive plan that lets all full- and part-time staff share in
the gains, based on local store and corporate performance. "We're
moving better and faster than ever before," Mr. Gennette said.
Shares in Macy's shot up nearly 11% Wednesday after the retailer
reported same-store sales growth that widely surpassed analysts'
estimates and raised its projections for the year.
Macy's said it now expects to earn between $3.75 and $3.95 a
share on an adjusted basis, a range 20 cents higher than its prior
guidance. The company also raised the prospects of seeing annual
sales growth. The department-store chain now expects annual sales
to be in a range of down 1% to up 0.5%, compared to its prior
forecast of sales falling between 0.5% and 2%.
Macy's revenue rose 3.6% to $5.54 billion.
Profit climbed 78% to $139 million, or 45 cents a share. On an
adjusted basis, the company earned 48 cents a share.
Macy's had less excess inventory to clear in the period, and
customers also spent more on full-priced goods. That helped the
average ticket price rise 5%, according to the company.
The retailer also benefited from a rebound in spending by
international tourists after they pulled back in recent years due
to the strong dollar.
Mr. Gennette said Macy's was getting traction from revamped shoe
and fine jewelry departments as well as a new loyalty program that
offers tiered rewards based on spending. It is also adding new
categories to its website through its vendor direct program, such
as drones and decorative home goods.
Mr. Gennette also pointed to the rollout out of Macy's
Backstage, the company's discount concept, as helping to buoy
sales. In the first quarter, Macy's opened about 20 of these
stores. It plans to open 100 this fiscal year.
The company also said earlier this month it bought a New York
City concept store called STORY that changes what it is selling and
its design every four to eight weeks. Macy's also said that STORY's
CEO and founder, Rachel Shechtman, will become a brand experience
officer at Macy's.
Mr. Gennette said another new hire, former eBay Inc. executive
Hal Lawton, was helping to give the company more operational
discipline and to better marry technology with the store
experience. One initiative is the rollout of mobile checkout to all
stores this year.
Separately, Macy's said it has ended its joint venture with Fung
Retailing Ltd. in China, but would remain on Alibaba's TMall
platform.
Macy's is also in line for a new chief financial officer. In
early April, the company said CFO Karen Hoguet would retire. She
will remain CFO until a new executive is appointed to take over her
role, but she will stay as an adviser until February. Macy's has
hired a search firm to help look for a new CFO.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Allison
Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
May 17, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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