Macy's Net Virtually Flat in Q2
CINCINNATI-In what Terry Lundgren, chairman, president and CEO, termed a "softer than anticipated" quarter, Macy's posted net income of $281 million in its second quarter, 0.7 percent ahead of last year's second quarter.
Net sales were down 0.8 percent to $6.1 billion in the quarter, which ended on Aug. 3, including 0.8 percent drop in same-store sales. Lundgren called this a disappointing result. "Our performance in the period, in part, reflects consumers' continuing uncertainty about spending on discretionary items in the current economic environment," he said.
Gross margin in the period slipped by 10 basis points to 41.8 percent. Selling, general and administrative expenses declined 0.4 percent in dollars, but were up 20 basis points as a percentage of sales to 33 percent.
The outlook for the third quarter is more positive, Lundgren said, in particular with the early results from the back-to-school season. The company has "intensified Macy's marketing support throughout the second half of the year to emphasize the fashion and value we deliver," he said. "We believe we have the right strategies in place at Macy's and Bloomingdale's, particularly in the omnichannel and online initiatives that are driving our business to a new level of shopping accessibility for our customer."
For the second half of the fiscal year, Macy's expects same-store sales to rise by between 2.5 and 4 percent, the company said. This would bring about a same-store sales gain for the fiscal year as a whole to between 2 and 2.9 percent.