Macy’s has reported a decline in sales for the second quarter, but the overall top-line performance was still better than the broader retail market, according to an analyst.
The company’s net sales for the quarter ended August 2 fell 2.5 per cent year-on-year to $4.8 billion, which was above management’s expectations.
According to GlobalData MD Neil Saunders, the second quarter was a challenging one for retail, but Macy’s has risen to the occasion and produced some sparkle.
The analyst believes the sales decline mainly came from the ongoing program of planned store closures. He added that the more pleasing signs came from comparable sales, which were up 0.8 per cent on an owned basis and by 1.9 per cent on an owned plus licensed basis.
While the uplift comes off the back of a weak prior year, this is the best comparable growth in three years, Saunders noted, adding that all banners helped drive the increase after patchier performance of recent quarters.
At the Macy’s banner, comparable sales rose 0.4 per cent on an owned-basis and 1.1 per cent for the 125 ‘reimagined’ locations.
“We need quite a few further quarters of this kind of uplift to fully bed in confidence, but the results chime with our data on improved satisfaction and customer ratings which are helping things like visitation and conversion,” Saunders commented.
“In essence, this holistic view of improvement is one of the things we like best about the approach of Tony Spring and his team. They understand that all aspects of the operation, from sourcing to service to styling to staging, all need to come together to create a strong value proposition for the consumer,” he added.
At Bloomingdale’s, comparable sales rose by 3.6 per cent on an owned basis, which Saunders said was a very strong growth against the backdrop of a luxury market that continues to show signs of weakness.
He attributed the solid performance to a strong brand mix that helped retain customers and secure their spending, as well as exclusive partnerships and some strong own-brand initiatives.
Bluemercury delivered its 18th consecutive quarter of growth with a 1.2 per cent comparable uplift, thanks to remodeled locations and a focus on growth areas like skincare.
On the bottom line, the company’s net income decreased from $150 million in the year-ago period to $87 million.
For the full year, Macy’s has raised its top-line guidance, expecting net sales to be $21.15 billion to $21.45 billion and comparable sales to be down 0.5-1.5 per cent.
“The second half of the year may prove to be a little more challenging as the company comes up against some not quite so weak prior year numbers and consumers tighten their spending.
“Nevertheless, the most important thing is that the fundamentals of the business are being strengthened,” Saunders concluded.
