November 12, 2014
Macy’s third quarter sales were lower than expected but the company still managed to grow profits by 30% and expressed optimism regarding the fourth quarter.
The department store retailer said same store sales declined 0.7% while total sales declined 1.3% to slightly less than $6.2 billion during the third quarter ended November 1. Net income increased 22.5% to $217 million while earnings per share, aided by the repurchase of nine million shares, increased 30% to 61 cents a share.
“We knew we were up against very strong third quarter sales growth for our company last year, and thus we had anticipated that our year-over-year comparison would be lower in the third quarter than in the fourth quarter. Even so, sales did not live up to our expectations in the quarter,” Lundgren said.
Looking forward, the company said it expects same store sales to increase 2% to 3% in the fourth quarter, but also lowered its full year profit forecast to a range of $4.25 to $4.35 cents from a range of $4.40 to $4.50 cents.
Lundgren said he is optimistic about the fourth quarter for a variety of reasons, including strong digital capabilities.
“First we have developed an outstanding merchandise assortment for holiday gift-giving and self-purchase rooted in great style, exclusive offerings and outstanding value during this key shopping period,” Lundgren said. “Second, we have enhanced our transition to fresh post-holiday vacation and resort assortments. Third, we have new store, omnichannel and marketing strategies in place that we believe will drive incremental business throughout the fourth quarter.”
For example, Macy’s said its buy online pickup in store capability is now rolled out to full-line Macy’s and Bloomingdale’s locations and it has same day delivery pilots up and running in eight major Macy’s markets and four Bloomingdale’s markets. The company said it also has improved functionality and usability in upgraded mobile apps.
Lundgren is also counting on the weather to lend a hand this holiday season.
“We are poised to capitalize on a return to more normalized weather patterns after the unusually severe snowstorms in the fourth quarter last year,” Lundgren said.
Source: Retailing Today
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