Macy’s lowers expectations after tough Q2
Cincinnati — Macy’s scaled back its earnings guidance for the remainder of the year in the wake of lower-than-expected net income for the second quarter of fiscal 2013. The retailer reported net income of $281 million, up from $279 million in the year ago period, but short of the roughly $304 million analysts had expected.
In addition, net sales fell .08% to about $6.07 billion instead of climbing 3% to $6.2.6 billion as analysts had expected. Same-store sales also declined .08%. As a result, Macy’s now predicts earnings for fiscal 2013 in the range of $3.80 to $3.90 per diluted share. Terry J. Lundgren, chairman, president and CEO of Macy’s, said consumer concerns about the economy impacted their spending during the quarter.
“We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event,” said Lundgren. “Even so, second quarter sales performance was softer than anticipated, and we are disappointed with the results. Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment. After a cool spring, we have taken appropriate markdowns and customers are responding favorably. Also on the positive side, we have seen a strengthening of the sales trend in key elements of women’s ready-to-wear, a category which has lagged over the past couple of years. Bloomingdale’s sales rebounded in the second quarter, and we are encouraged by our recent momentum,
Looking ahead, Lundgren said incremental sales opportunities in childrenswear, activewear and Impulse apparel, as well as intensified marketing support, omni-channel and online initiatives, localization and customer engagement strategies should all help boost sales later this year.
“Going into the third quarter, we also are encouraged by our early read on the back-to-school season,” he said. “We accelerated receipts of fresh inventory at Macy’s so we could be fully prepared for an early start to the academic year in certain regions of the country.”