Macy’s Posts Strong Second Quarter
All three divisions - Macy's, Bloomingdale's and Blue Mercury - were cited for performing well.
Macy’s Inc., performing well across all divisions, reported that its net income for the second quarter rose to $166 million, compared to $111 million in the year-ago quarter.
Excluding impairment and other costs, settlement charges and losses from early retirement of debt, net income for the second quarter of 2018 totaled $219 million, versus $141 million a year ago.
Earnings per diluted share came to $0.53, or $0.70 excluding impairment and other charges, versus $0.36 per share in the second quarter of 2017, or $0.46.
Comparable sales in the latest quarter, which ended Aug. 4, were up 0.5 percent. That figure includes owned and licensed sales.
Net sales in the second quarter totaled $5.57 billion, a decrease of 1.1 percent, compared with net sales of $5.64 billion in the second quarter of 2017.
Macy’s cited some timing adjustments in its promotional calendar, including a shift in the spring friends and family promotion which positively impacted the first quarter by approximately 250 basis points but brought down the second quarter by about 240 basis points. Adjusting for this shift, the retailer estimated comparable sales, owned and licensed, rose 2.9 percent in the second quarter.
With the economy strong and Macy’s managing its business better, the company sees momentum heading further into the second half, and updated its guidance for fiscal 2018. Macy’s now expects adjusted earnings per diluted share of $3.95 to $4.15, excluding anticipated settlement charges related to benefit plans, impairment and other costs. The previous guidance was set at $3.75 to $3.95.
Comparable sales are seen rising between 2 and 2.5 percent for the second half of 2018, which translates to an annual increase of between 2.1 and 2.5 percent.
“Macy’s Inc. delivered strong performance in the first half of the year, and we are pleased to report our third consecutive quarter of comparable sales growth. Macy’s, Bloomingdale’s and Bluemercury all performed well,” said Jeff Gennette, chairman and chief executive officer. “It is encouraging to see the continued strengthening of our brick and mortar business where we saw trend improvements across the portfolio, led by our Growth50 stores,” Gennette added, referring to the retailer’s top 50 stores were the company is investing strongly.
“The combination of healthy stores, robust e-commerce and a great mobile experience is Macy’s recipe for success,” Gennette sadded. “We are focused on improving our customer journey every step of the way because we know that our customers expect a great experience whenever and wherever they engage with our brands,” said “We also continue to be disciplined with inventory management, which allows us to give our customers more fashion and freshness, while increasing sales and improving gross margin.”
Gennette said the company’s “strategic initiatives are gaining traction. They contributed to our first half results and will continue to have a positive impact on our performance in the back half of the year. This, combined with continued strong execution and a healthy consumer spending environment, gives us confidence to raise sales and earnings guidance for fiscal 2018.”