Comparable sales on an owned basis grew 0.2% while comparable
sales on an owned plus licensed basis grew 0.3%.
Reported net income was $86 million, or $0.28 per share,
compared to $166 million, or $0.53 per share, in the prior-year quarter. Adjusted
net income totaled $88 million, or $0.28 per share, way below forecasts of
$0.46 per share.
During the quarter, Macy’s faced challenges from high inventory levels which resulted mainly from a fashion miss in its women’s sportswear brands, slow sell-through of warm weather apparel and a decline in international tourism. The company said it took markdowns to clear the excess spring inventory and is now entering the fall season with the right inventory to meet anticipated customer demand.
Jeff Gennette, CEO, said, “We
continue to see healthier sales within our brick and mortar business, led by
our Growth50 stores and Backstage expansion. Our digital business posted its
fortieth consecutive quarter of double-digit growth, and mobile remained our
fastest growing channel.”
The company also said that its 2019 strategic initiatives are on
track to contribute to sales growth in the latter part of the year and there
are plans in place to drive productivity and improve gross margins.
Asset sale gains for the quarter totaled $7 million pretax, or $5 million after-tax and $0.01 per diluted share attributable to Macy’s, Inc. shareholders. This compares to asset sale gains of $46 million pretax, or $34 million after-tax and $0.11 per diluted share attributable to Macy’s, Inc. shareholders last year.
For the full year of 2019, Macy’s expects comparable sales on an owned basis, as well as owned plus licensed basis, to be flat to up 1%. Net sales are expected to be approx. flat. Based mainly on the second quarter performance, the company lowered its guidance for adjusted EPS to a range of $2.85-3.05 from the previous range of $3.05-3.25.
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