Macy's home "very strong" in Q1 even as it sees some resistance for price increases
Meredith Schwartz -- Home Textiles Today, May 11, 2011
Cincinnati - Despite some recent price increases on moderate-level product offerings, home was among the best performing categories at Macy's during the first quarter when the department store reported high single-digit gains in both sales and comps.
"We have done some limited testing in terms of price increases, and most of the areas we've tested so far have tested OK or well. [We've seen] maybe some resistance in our moderate home categories, but so far no surprises," said Karen Hoguet, cfo, in response to an analyst's question during the Macy's webcast earnings conference call this morning.
Speaking in more general terms, she later added: "I think so far we feel that, as we thought of how the customer is going to behave, we've mapped out [our price increases] pretty well. In some cases, small increases have worked OK, and in other cases we've reduced units, and we think that is appropriate, too. The concerns about price inflation have been overstated and clearly something making our lives challenging...We have a whole group of pricing analysts studying it. But I am not as concerned as you are about it."
Earlier in the call, during her prepared statements, Hoguet singled out home as among the departments posting "very strong" sales in the quarter.
Macy's overall first-quarter sales were up 5.7% to $5.889 billion compared to $5.574 billion a year ago. Comparable-store sales increased 5.4%, and net income came in at $131 million versus the $23 million in the first quarter of 2010.
Earnings for the quarter were 30 cents per share, compared with 5 cents per share last year.
Online sales for macys.com and bloomingdales.com combined were up 38.3% in the 13-week period, positively impacting the company's same-store sales by 1.3 percentage points in the first quarter. Online sales are included in the same-store sales calculation for Macy's, Inc."We feel great about our performance in the first quarter, and our sale growth continues to be strong," said "The momentum from our restructuring and implementation of My Macy's is building and bodes very well for our future."
Based on its favorable first quarter results and an improved outlook, Macy's has increased its full-year 2011 guidance. It now expects same-store sales to grow 4.3% this year compared with previous guidance for 3%.
Earnings per diluted share are expected to be in the range of $2.40 to $2.45, compared with previous guidance of $2.25 to $2.30 per diluted share in fiscal 2011.