Macy's touts best 2Q in a decade; home among strongest areas
Home Accents Today Staff -- Home Accents Today, August 10, 2011
Cincinnati - Macy's Inc. said just wrapped up what it described as its strongest second quarter period in the past 10 years, with better-than-expected comps and sales results.
The quarter's best performing merchandise categories included home as well as jewelry, watches, fashion accessories, cosmetics, fragrances and men's. Also strong were private brands. Martha Stewart Collection "continues to see strength," cfo Karen Hoguet, said during Macy's earnings conference call this morning.
Cotton price increases forced Macy's to increase its retails in several categories. This fall, Hoguet said, apparel and home textiles are set to see the highest relative price or cost increase.
"As we look to the fourth quarter, we are cognizant of some price increases," Hoguet continued. "Our initial experiences with price increases have proven to be generally consistent with our expectations in terms of unit sales."
The 850-plus unit department store chain boost earnings per share by 57% to 55 cents for the quarter, "well ahead of our expectations," noted Hoguet. The jump was driven by sales and improvement in Macy's credit performance.
Sales rose 7.3% to $5.94 billion, and comparable store sales increased 6.4%.
For the year to date, Macy's sales were up 6.5% to $11.83 billion, and comps were up 5.9%. Macy's started the year expecting a comps growth of 3% for both the first half and the full year of 2011.
Online sales - macys.com and bloomingdales.com combined - jumped 40.2% in the second quarter and 39.2% in the first half. Online sales positively affected the company's same-store sales by 1.2 percentage points in the quarter and 1.3 percentage points in the year to date.
Macy's is "cautious but optimistic" about the second half of this year, Hoguet said. Reluctant to share details about the company's holiday plans when asked by an analyst, she offered that Macy's is building on last year's gift strategy and plans to be omni-channel this year.
Macy's currently expects same-store sales in the second half of fiscal 2011 to grow 4% to 4.5%, which would result in full-year 2011 same-store sales being up between 4.8% and 5.1%. At the beginning of the year, the company's initial guidance was for fiscal comp gain of approximately 3%. In July, full-year same-store sales guidance was raised to an increase of approximately 4.8%,
For the full year 2011, Macy's is increasing its earnings guidance to $2.60 to $2.65 per share, including $1.74 to $1.79 per share in the second half of 2011. This compares with previous full-year guidance of $2.40 to $2.45 per share, and initial earnings guidance of $2.25 to $2.30 per share provided at the beginning of the year.