Macy's Q1 Sales Down, But Improvements Are Seen

First quarter sales at Macy’s, Inc., were down 2.7% as the department store retailer reported a drop in sales at its Macy’s nameplate stores.

For the quarter ended May 4, net sales were $4.8 billion, down from net sales of $5.0 billion in the same quarter the previous year. Comparable sales were down 1.2% on an owned basis and down 0.3% on an owned-plus-licensed-plus-marketplace basis. Net income was $62 million, down from net income of $155 million in the comparable quarter the prior year. Diluted earnings per share were $0.22 compared with diluted earnings per share of $0.56 in the first quarter of the prior fiscal year.

“We are encouraged by our customers’ response to our Bold New Chapter strategy resulting in sales near the high end of our outlook,” said Tony Spring, chairman and chief executive officer of Macy’s, Inc. “Our teams executed with discipline and efficiency, which contributed to first quarter earnings that exceeded our expectations. At the Macy’s nameplate, go-forward business performance was led by our First 50 locations, which achieved comparable sales growth year-over-year and are a leading indicator for our go-forward fleet. Although early days, our investments in product, presentation, and experience are gaining traction and reinforce our belief that longer-term, Macy’s, Inc. can return to sustainable, profitable growth.”

Macy’s nameplate stores reported a comparable sales decrease of 1.6% on an owned basis and down 0.4% on an owned-plus-licensed-plus-marketplace basis. Bloomingdale’s comparable sales were up 0.8% on an owned basis and up 0.3% on an owned-plus-licensed-plus-marketplace basis.

Macy’s go-forward business comparable sales, inclusive of Macy’s go-forward locations and digital, were down 1.3% on an owned basis and flat on an owned-plus-licensed-plus-marketplace basis. Go-forward locations’ comparable sales were up 0.1% on both an owned and owned-plus-licensed basis.

The First 50 locations' comparable sales, included within go-forward locations' comparable sales, grew 3.3% on an owned basis and were up 3.4% on an owned-plus-licensed basis.

The company has updated its full-year forecast and is estimating net sales of between -1.0% and up 1.5%, an improvement over previous guidance that called for sales of between -1.5% and up 1.5%.