Macy’s Inc. reported declines in profits and revenues in the first quarter due to lingering West Coast port issues, a stronger dollar and unseasonable weather, the company said. The company also attributed its “disappointing” quarter to a “learning curve” as it reorganized its “merchandising, planning and marketing functions” as well as the industrywide decline in retail sales.
Net Income: Macy’s said its net income for the quarter, ended May 2, 2015 was $193 million — down 14 percent versus the year-ago quarter’s $224 million.
EPS: Earnings per diluted share fell 4 cents year-over-year, to 56 cents.
Net Revenue: Net sales for the quarter totaled $6.23 billion, down 0.7 percent from the year-ago quarter’s net sales of $6.28 billion.
Hit, Miss or Beat: Macy’s performance in the first quarter missed Wall Street’s forecasts for both EPS and revenues. Analysts polled by Yahoo Finance had predicted revenues of $6.32 billion and EPS of 62 cents per share.
Executive Insights: “One of the hallmarks of Macy’s Inc. in recent years has been our ability to overcome obstacles and succeed despite a variety of challenges and macroeconomic factors. In a lot of ways, we did have the deck stacked against us in the first quarter. [This] included external factors, such as weather, port bottlenecks, the value of the dollar and a sawtooth economy.… There were also internal factors, such as the impact of our omnichannel reorganization, which we believe caused some inadvertent but short-term disruption. While we are disappointed in our first-quarter results, we are not discouraged.” — Macy’s CFO Karen Hoguet, during a May 13 conference call
On Footwear: “Shoes have done well, beauty is doing quite well, fragrances in particular are very strong. So hopefully there’s no major change in Center Core as the total. And again, we’re looking for ways of offsetting that jewelry/watch slowdown.” — CFO Hoguet
On Acquisitions: “ We always look at buy versus build alternatives, and we’ll continue to do so. In that case, we’ve got to test it and see what we think and decide — assuming [the acquisition] is successful — what’s the right way of scaling it quickly?” — CFO Hoguet
Looking Ahead: The company reiterated its 2015 guidance.