Despite hopeful signs in home, Macy’s lowers guidance
August 15, 2007,
Cincinnati – Admitting that customer demand for home goods remains “less strong than we expected,” Macy’s Inc. said performance is looking up.
Nonetheless, with second quarter profits down 77% on a 1.7% sales decrease, the corporate parent of department store chains Macy’s and Bloomingdale’s today lowered its outlook for the year. Net income was $74 million for the period ended Aug. 4 on sales of $5.9 billion. Comps declined 2.6%.
Macy’s Inc. now expects earnings per diluted share – excluding merger integration costs, to run between $2.15 to $2.30. Merger costs for the year are expected to total from $150 million to $160 million. The company anticipates full-year sales of $25.5 billion to $26.8 billion, with comps ranging from down 1% to up 0.5%.
Throughout the quarter, business in soft home categories and mattresses were stronger, and furniture had “a great month” in July, Hoguet said. Additionally, she said, early sell-throughs were “very encouraging” for the initial Martha Stewart Collection products, which just began rolling out on store floors “in any quantity” toward the end of the quarter. The official launch is Sept. 9.
Hoguet noted an “interesting” development in the early Martha Stewart offering: 35% of Macy’s bridal registries in July included Martha Stewart products, “and that was without the full assortments on the floor. This demonstrates to us the customer identifies with the brand, likes the product offering and understands the incredible value that it offers.”