Macy’s is riding high after pulling off a strong first quarter — keeping up its momentum following robust holiday sales.
The retailer’s net sales increased 3.6 percent to $5.54 billion, beating analyst predictions. Comparable sales, which saw their first boost at the end of 2017 after 11 straight quarters of declines, were up 3.9 percent on an owned basis, or 4.2 percent on an owned plus licensed basis.
While it may be too soon to call a definitive turnaround, particularly in the midst of what CEO Jeff Gennette on Wednesday’s earnings call described as “the most competitive retail environment I’ve ever seen,” signs are hopeful for the company, which raised its projections for adjusted earnings per diluted share from $3.75 to $3.95 for the year, again surpassing analyst forecasts.
Net income totaled $139 million for the quarter, or 2.5 percent of sales, compared to $78 million, or 1.5 percent of sales, for the same quarter last year.
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On the call, Gennette attributed some of the gains to a 10 percent uptick in international tourism spending, along with what he called “a very healthy inventory position,” indicating that the retailer has made better merchandising decisions and relied less on discounting to sell through product. All three of the parent company’s sub-brands — Macy’s, Bloomingdale’s, and Bluemercury — posted strong results, he said, calling out the customer response to Bloomingdale’s new 40,000-square-foot shoe floor.
“Fashion is selling,” said Gennette. “We’re getting better sell-throughs and we’re getting better value on it.”
He also pointed to the success of the company’s growing off-price division, Backstage, which is opening locations in more than 100 Macy’s stores in 2018, including in premium malls. Those open more than a year have seen positive comp sales, he said, and shoppers that visit them have been spending more and visiting more often.
Shares for Macy’s Inc. were up 8.92 percent to $32.60 as of 11:30 am EST Wednesday.