Backstage expansion at forefront of Macy’s turnaround efforts
August 10, 2017,
During the department store’s earnings call today, cfo Karen Hoguet said Backstage is adding about 6% in incremental sales to the 38 Macy’s stores in which it is currently operating.
“We believe this strategy, which offers simplified pricing, a treasure-hunt environment and lower price points, is resonating with many of our customers and adding to the Macy’s experience,” she said. “We continue to test different approaches and monitor the results, and expect tot decide by year-end how best to expand this concept within our stores.”
Backstage was a highlight for Macy’s in an otherwise difficult second quarter, during which the company opened 12 new locations within existing Macy’s stores.
Net income soared to $113 million from $9 million last year, with diluted earnings per share of $038 versus $0.03.
But sales fell 5.4% to $5.55 billion compared with $5.86 billion, which Macy’s noted reflects, in part, the closure of stores previously announced.
Comparable sales on an owned basis were down 2.8% and declined 2.5% on an owned plus licensed basis.
Year to date, net income was up 48% to $183 million, or $0.61 per diluted share, from $124 million, or $0.41 per diluted share. Sales were down 6.4% to $10.89 billion from $11.63 billion. And comps on an owned basis declined 4.0% on an owned basis and fell 3.6% on an owned plus licensed basis.
"Macy's, Inc.'s results for the second quarter were in line with our expectations, and we are on track to meet 2017 sales and earnings guidance,” said Jeff Gennette, Macy's president and CEO. “We saw a notable contribution from the full execution of our new women's shoe and jewelry models and the continued successful testing of Backstage in store.”
Reaffirming its previously provided guidance for full-year 2017, Macy’s continues to work toward an enhanced omni-channel existence.
"We…will adapt our business in order to reach our goal of stabilizing the brick-and-mortar business while investing for accelerated growth in digital and mobile,” he continued. “Key to this strategy is engaging our customers with an improved experience that includes more elevated and exclusive assortments, a better integration of technology both online and in the store, and additional enhancements intended to drive traffic and sales.”
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See the August 2017 issue of Home & Textiles Today. In this issue, we look at the Top 50 Retailing Giants Report, plus Manufacturing: Made in the USA gaining ground; International: Portugal ramping up exports; New products: NY Now home textiles introductions; Outlook: Commentary from H&TT's editors; and Planning: Trade show calendar.