Macy's Net Climbs 38 Percent in First Quarter
CINCINNATI-Macy's began its fiscal year with a healthy 38 percent gain in first-quarter net income, which totaled $181 million.
Strong sales momentum and a wary eye on expenses helped firm the department-store retailer's bottom line in the quarter, which ended on April 28. Net sales rose 4.3 percent to $6.1 billion, including a pickup of 4.4 percent in same-store sales and a whopping 33.7 percent rise in online sales at both macys.com and bloomingdales.com. The latter increase helped boost the same-store sales count by 1.5 percent in the quarter, Macy's said in a statement.
Terry Lundgren, Macy's chairman, president and CEO, credited the company's key initiatives for boosting the quarterly results. The My Macy's merchandise localization; the omnichannel integration of stores, online and mobile; and MAGIC Selling for "enhanced customer engagement" all contributed to the positive quarter, Lundgren said.
Selling, general and administrative expenses edged up 1.1 percent but dropped 110 basis points as a percentage of sales to 32.4 percent. Gross margin slipped 30 basis points to 38.8 percent.
Lundgren said, "We have numerous initiatives in place to generate continuous improvement at Macy's and Bloomingdale's in the coming quarters and years, including new thinking we recently announced for attracting customers in the millennial generation." He was referring to Macy's strategies, announced in March, for driving more millennials to its stores--which include the development of lifestyle profiles, enhanced and localized merchandise assortments and reconfigured in-store and online environments to attract millennials.