Macy's Net Rises 3.9 Percent in Q2
CINCINNATI-With sales trending up thanks to a rebound in traffic after a difficult winter, Macy's second-quarter net income increased 3.9 percent to $292 million.
Net sales in the quarter, which ended on Aug. 2, were up 3.3 percent to $6.3 billion, including a pickup of 4 percent in same-store sales. Terry Lundgren, Macy's chairman and CEO, noted that sales improved at both Macy's and Bloomingdale's during the quarter, as shoppers enjoyed the return to more normal weather by traveling to the stores.
"Advancements in our M.O.M. strategies--My Macy's localization, omnichannel integration and Magic Selling customer engagement--continued to drive sales growth across the country," Lundgren said. "We are also very pleased by customer response to improvements at our Macy's Herald Square flagship in New York, where we are mid-way through the third year of an unprecedented remodel project."
Gross margin in the quarter slipped by 40 basis points to 41.4 percent. Selling, general and administrative expenses edged up 1.3 percent in dollars but were down 70 basis points as a percentage of sales, to 32.3 percent.
For the second half of the fiscal year, Macy's is projecting same-store sales growth of from 2 to 3 percent. For the full year, same-store sales are expected to register growth of from 2 to 2.5 percent.
"We are approaching the second half of 2014 with confident optimism in our business strategies, merchandise assortments and marketing plans, tempered with the reality that many customers are still not feeling comfortable about spending more in an uncertain economic environment," Lundgren said. He added that Macy's will continue to focus on innovating in its omnichannel operation and on its millennial strategies, which "have sharpened our merchandising and marketing to customers in the age range of 13 to 30. This has created new positive energy as our customers begin back-to-school shopping."