NEW YORK–The home business was a mixed bag at Macy’s in the fourth quarter, as the retailer posted sales and earnings drops as it navigates through the worst economic environment of its generation, the company said.
Net earnings for the fourth quarter ended Jan. 31 sank 59 percent to $310 million.
The most recent fourth quarter reflects $58 million in unusual items, mostly from division consolidation costs.
Earlier this month, Macy’s cut 40 percent of its executive staff as part of a move to cut 7,000 positions, consolidate its divisional structure into a single entity and eliminate the New York-based Macy’s Home Store division.
Sales fell 7.7 percent to $7.93 billion. Comparable-store sales fell 7 percent.
“Practical categories driven by a strong value proposition,” such as housewares, did well during the quarter, while “discretionary luxury” businesses, such as tabletop and furniture, did not, said Karen Hoguet, chief financial officer, during a conference call.
Bloomingdale’s showed a significant weakening trend during the quarter.
“It’s more like what you’re seeing in the upscale segment,” Hoguet said. “Bloomingdale’s is also being hit by the weakness in New York City. … The good news is they’re continuing to beat the upscale competition.”
The retailer is betting big on My Macy’s with plans to expand it across the United States. My Macy’s is an organizational structure the retailer started testing in 20 markets last year to localize assortments.
My Macy’s units are outperforming the retailer’s other stores, Hoguet said.