Home helps push Macy’s to 1Q profit
May 12, 2010,
Cincinnati – Macy’s Inc. cited home as one of three strongly performing categories for the first quarter as it reported earnings per share of 5 cents, a pivot from last years’ 1Q loss of 16 cents per share excluding restructuring charges.
She attributed the improvement to the fact that Macy’s home team has been organized as a single operating unit for several years (since early 2004) whereas other departments were similarly revamped only a year ago. That put the home group in a better position to take advantage of the My Macy’s localized merchandising program right away, she said.
Men’s and women’s also did well during the quarter, as did private brands and exclusives, she said.
Internet sales jumped 34%, and Hoguet said the company is “working on an accelerated growth strategy for both Macy’s and Bloomingdales.”
Sales for the quarter ended May 1 rose 7.2% to $5.57 billion, with comps up 5.5%. The company now includes sales of private brand goods to third parties and sales of excess inventory in its total sales figure. That accounting change does not impact comps, said Hoguet.
After raising earning guidance recently, Hoguet backed away from further forecasts during the call. “We’re continuing to see strong sales trends. We just don’t want to get ahead of ourselves,” she said.
Gross margin was 39.4% of sales, up 130 basis points from last year’s first quarter and up 80 basis points from the first quarter of 2008.
Asked about rising raw materials costs, Hoguet said the company’s sourcing team “will minimalize any impact as they move through this process.”
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