Optimism abounds at Macy’s heading into holidays
A tepid economic climate and government shutdown weren’t enough to prevent Macy’s from producing a 3.5% third quarter same store sale increase and better than expected profits which prompted the department store operator to reiterate it full year financial forecast.
Sales in the third quarter ended November 2, increased 3.3% to nearly $6.3 billion. Total profit increased 22% to $177 million from $145 million while earning per share increased 31% to 47 cents a share, well ahead of analysts’ estimate of 39 cents, from 36 cents a share. As a result, Macy’s reiterated sales and earnings guidance it provided in August which envisions comps for the second half of the year in the range of 2.5% to 4% and full year profits of $3.80 to $3.90.
“Our improved sales performance resulted from continued success in the execution of our key strategies - My Macy's localization, Omnichannel integration and Magic Selling customer engagement,” Macy’s chairman, president and CEO Terry Lundgren said of the performance. “In addition, business in the third quarter benefitted from intensified marketing strategies to emphasize the outstanding value in our merchandise deliveries. Both Macy's and Bloomingdale's performed well in the quarter, and we saw improvement in the sales trend in every region of the country compared with the spring season.”
Most notably, Lundgren said Macy’s business improved during the October which allowed the company to enter the fourth quarter with confidence in its offering of gifts, fashion, value and service.
"Our success in the fourth quarter will be driven by a wide selection of exclusive products from the most-wanted brands and designers,” Lundgren said. “We will bring them to our customers, whether they shop in our stores, online, via mobile, or all three. The values we offer will be appealing. We will be better able to satisfy customers' needs with an energized organization supported by the hiring of 83,000 seasonal associates. Our in-store and online executions will complement each other, and our marketing will clearly communicate the Magic of Macy's and the exceptional holiday fashion at Bloomingdale's."
Macy’s ended the third quarter with 840 stores in 45 states.