Macy's Net Balloons Second Quarter
CINCINNATI--Macy's enjoyed a 2,000 percent increase in its net income in the second quarter, to $147 million.
The result was due to a 7.2 percent gain in net sales, to $5.5 billion, and the absence of a $34 million charge from last year's second quarter related to restructuring costs and expenses from the retailer's division consolidation and localization initiatives. Even not counting that charge, however, Macy's bottom line improved by nearly 260 percent in the quarter.
Terry Lundgren, chairman, president and chief executive officer, cited the localization of merchandise assortments--along with the centralization of organizational functions, continued development of private-label brands and the integration of stores and online channels at both Macy's and Bloomingdale's--as crucial to the company's profit growth. Lundgren said the second quarter created "tremendous momentum" for Macy's entering the fall season.
The company's gross margin rose by 40 basis points in the second quarter to 41.9 percent. Selling, general and administrative expenses increased 5 percent on a dollar basis, but dropped 80 basis points as a percentage of sales.