CINCINNATI–Furniture, mattresses and its upscale Bloomingdale’s chain were the softest parts of Macy’s business during the third quarter as shoppers skewed their purchases to lower-priced fare, said Karen Hoguet, chief financial officer, during a conference call.
For the quarter ended Nov. 1, Macy’s posted a $44 million net loss, compared with earnings of $33 million in the year-ago quarter.
The most recent quarter included $16 million in division consolidation costs, while the 2007 quarter included integration costs of $17 million from Macy’s acquisition of May Department Stores Co.
Sales fell 7.0 percent to $5.5 billion. Same-store sales fell 6.0 percent.
During the quarter, a few “concerning trends” emerged, Hoguet said.
“The average unit retail declined in October for the first time I can remember,” she said, “And there was a slip in the regular-priced business.”
Indeed, the everyday-low-price part of Macy’s mix, about 6 percent, was the stronger part of the business during the quarter.
Cold-weather home textiles was one bright spot in home.
Although Macy’s performance was weak, the retailer continued to outshine its direct competitors, Hoguet stressed.
“Consumers are pulling back in reaction to the economy,” Hoguet said. “This is the most challenging business environment that I’ve experienced. … We won’t be able to predict the [holiday] season accurately until we’re through it.”
If deteriorating sales trends continue through the fourth quarter, sales and earnings are expected to be toward the lower end of the guidance range, Hoguet said.
However, as shoppers think of Macy’s when it comes to holiday gifts, “that’s the reason for the optimism for the fourth quarter. … I’m less confident about spring 2009.”
Given consumers’ recent interest in value goods, Macy’s will rethink its spring marketing campaign, Hoguet said.