Macy's sales growth comes to a halt in Q3 2015
Macy’s, Inc. on Wednesday announced its financial results for the third quarter of its fiscal 2015. The company reported a decrease in sales for the quarter and a drop in reported earnings per share.
Net sales decreased 5.2% to $5.874 billion from $6.195 billion in the same period last year. Comparable sales on an owned plus licensed basis were down 3.6%, and comparable sales on an owned basis were down 3.9%.
The company’s sales year to date decreased 2.8% to $18.210 billion from $18.741 billion in the comparable period of last year.
“We are disappointed that the pace of sales did not improve in the third quarter, as we had expected. Spending by domestic customers remained tepid, especially in key apparel and accessory categories. Simultaneously, the slowdown in buying by international visitors continued to significantly impact Macy’s and Bloomingdale’s stores in tourist centers, which are some of our company’s largest-volume and most profitable locations,” said Terry J. Lundgren, chairman and chief executive officer of Macy’s, Inc.
“We have begun testing and learning from new sales growth initiatives that we believe will begin yielding incremental results in the quarters and years ahead. This included the opening of the first five Macy’s Backstage off-price stores in the New York City metro area (with a sixth opening planned in the fourth quarter),” Lundgren said.
The retailer also reported a decrease in earnings per share to $0.56 cents per share compared to $0.61 cents per share in the previous year’s comparable quarter.
Lundgren said. “No other retailer has our track record of mastering change and creating shareholder value with a model of customer centricity. We have a deep and resourceful management team that is skilled in creating and executing successful strategies. Since the beginning of fiscal 2009, we have returned nearly $9 billion to shareholders. Our Total Shareholder Return has been 540 percent during that period, compared with a 121 percent increase in the Dow Jones Industrial Average.”
Macy’s plans to open 50 free-standing Macy’s Backstage stores over the next two years, open Backstage stores within 10 existing Macy’s stores, open 40 additional Bluemercury stores and continue to expand the company internationally.
The company has also recently completed renovations on its men’s department at its Herald Square store in New York City, as well as introduced the One Below floor for millennial shoppers at the flagship location. Both additions are part of Macy’s $400 million renovation plan that began in 2011. In addition, Macy's signed an exclusive deal with Luxottica to open LensCrafters licensed departments in as many as 500 Macy’s stores over the next three years.
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