Macy's Reverses Loss, Posts $10 Million Profit in Q3
CINCINNATI-Macy's reported net income of $10 million for the third quarter ending Oct. 30, 2010, turning around a $35 million loss from the third quarter of last year.
The department-store retailer managed to go from red to black largely because of the absence this year of costs for division consolidation--which in the third quarter of last year totaled $33 million. In addition, net sales rose 6.6 percent to $5.6 billion. This included an increase in same-store sales of 3.9 percent.
Selling, general and administrative expenses rose 1.8 percent on a dollar basis, but dropped 160 basis points as a percentage of sales to 36.9 percent. Gross margin declined 20 basis points to 40 percent.
Terry Lundgren, Macy's chairman, president and chief executive officer, said the company has "gained confidence and momentum" throughout 2010, thanks to the execution of key strategies over the past few years. Lundgren credited the My Macy's program--through which the retailer tailors assortments according to locations and regions--for "creating a leading nationwide brand with a local focus on each market." In addition, he said Bloomingdale's is capitalizing from the return of upscale consumers to its doors.