Macy's Q1 Net Up, Sales Down
CINCINNATI-In spite of a drop in sales, Macy's managed to raise its first-quarter net income by 3.2 percent, to $224 million.
An improvement in gross margin and reductions in expenses keyed the bottom-line pickup in the quarter, which ended on May 3. Gross margin increased by 10 basis points to 38.9 percent. Selling, general and administrative expenses were slimmed by 2 percent in dollars and 20 basis points as a percentage of sales, to 31.8 percent.
Net sales totaled $6.3 billion, down 1.7 percent and including a same-store sales decline of 1.6 percent. Terry Lundgren, Macy's chairman and CEO, said sales trends were soft from January through March, after which sales began to improve as the weather turned warmer in the nation's northern regions. Lundgren also said first-quarter comparisons suffered due to a Macy's shift of its Friends & Family event, and from the fact that last year's first quarter was very strong.
Lundgren added that Macy's still feels positive about the outlook for all of 2014. "The fundamentals of our business and our ongoing strategies remain strong," he said. "This, combined with the momentum we have built over the past five years, leads us to feel confident about the company's prospects."