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RAPAPORT... Macy's Inc. reported that revenue edged down by 0.8 percent year on year to $6.07 billion for the second fiscal quarter that ended on August 3. Same-store sales also fell 0.8 percent. Cost of sales contracted 0.6 percent to $3.53 billion, and gross margin came to 41.8 percent compared with 41.9 percent one year earlier. Profit rose only 0.7 percent to $281 million or 72 cents per diluted share. In the second quarter, the company opened a new Macy’s store in Gurnee, Illinois and a Bloomingdale’s Outlet store in Rosemont, Illinois. One Macy’s store was closed in St. Louis, Missouri. Macy's reported a sales increase of 1.6 percent year on year to $12.5 billion for the first fiscal half, and comparable-store sales rose 1.5 percent. Profit rose 8.3 percent to $498 million. In the second half, Macy's is opening a new Bloomingdale’s store in Glendale, California and a new Macy’s replacement store in Bay Shore, New York. The company expects comparable-store sales in the second half to increase in the range of 2.5 percent and 4 percent. However, Macy's lowered earnings guidance more than a nickel to $3.80 to $3.90 per diluted share for the fiscal year. “We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event. 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,” said Terry J. Lundgren, Macy’s CEO and chairman. He added that Macy's is encouraged by the back-to-school season as the retailer captures incremental sales opportunities in children's wear, activewear and Impulse brand apparel. ''We also have intensified Macy’s marketing support throughout the second half of the year to emphasize the fashion and value we deliver,'' Lundgren said. ''We believe we have the right strategies in place at Macy’s and Bloomingdale’s, particularly in the omnichannel and online initiatives that are driving our business to a new level of shopping accessibility for our customer. Our My Macy’s localization and Magic Selling customer engagement strategies continue to differentiate the Macy’s shopping experience. We have dissected the fall calendar and related merchandise strategies for the second half and we remain confident about our prospects for growth in the remainder of the year.''
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