Soft home sales are a miss at Macy’s Inc. nameplates

New York – Macy’s Inc. said it weathered the fourth quarter’s “increasingly volatile macroeconomic climate” with a disciplined inventory approach, compelling gift-giving strategy and competitive pricing – balanced by measured promotions and strategic markdowns.

In the three-month period, Bloomingdale’s outshined Macy’s with its positive comp.

But soft home underperformed the company average in the three-month period at both Macy’s and Bloomingdale’s.

Working through “conflicting data regarding the U.S. consumer,” Macy’s is entering the new fiscal year with a variety of initiatives that leverage the strength of its off-price-to-luxury spectrum of businesses across its portfolio.

“On the surface, the consumer is in better shape than 2019. Jobs and wages are strong, and savings are elevated relative to historic levels,” said CEO and chairman Jeff Gennette during the retailer’s earnings call and presentation last week. “But prices for services and goods are higher, inflation has surpassed wage growth, and revolving credit is rising.”

The company is expecting discretionary spending to remain under pressure across income tiers. “And we expect the allocation of disposable income to continue shifting toward services and essential goods,” he said.

To leverage its opportunities, Macy’s Inc. is focusing on “five growth vectors,” which include: the reimagination of its private brands, off-mall expansion, online marketplace, luxury brands acceleration and personalized offers and communication.

Macy’s Inc.’s performance in Q4 included:

  • A 31.5% net income drop to $508 million, or $1.83 per diluted share, from $742 million, or $2.44 per diluted share, last year;
  • A 4.6% net sales decline to $8.3 billion versus $8.7 billion. By channel, digital sales fell 9% and brick-and-mortar sales dipped 2%;
  • Comparable sales declined of 3.3% on an owned basis and 2.7% on an owned-plus-licensed basis.

On the plus side, Macy’s experienced sales strength in gifting and occasion-based categories, including beauty, men’s tailored apparel, dresses and shoes. But soft home, along with active and casual, declined versus the prior year.

Bloomingdale’s was better off in Q4, posting comparable sales gains of 1.2% on an owned basis and 0.6% on an owned-plus-licensed basis. Category bright spots included beauty, women’s and men’s apparel (both contemporary and dressy). But those successes were overshadowed by slowed sales in handbags and home textiles.

Results for the the full year included:

  • An 18% net income decrease to $1.18 billion, or $4.19 per diluted share, from $1.43 billion, or $4.55 per diluted share, in the prior year;
  • A 0.1% net sales dip to $24.44 billion versus $24.46 billion. By channel, digital sales fell by 6%; but brick-and-mortar sales were up by 3%;
  • Comparable sales grew by 0.3% on an owned basis and by 0.6% on an owned-plus-licensed basis.

The company’s outlook for the full year projects a net sales decrease of 1% to 3% and a comp decline of 2% to 4%.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts