Macy’s second-quarter profit jumps almost 16%; sales rise 3%
Department store giant Macy’s Inc. reported a nearly 16% jump in second-quarter profit as online sales grew and shoppers responded enthusiastically to its localized merchandise offerings.
For the three months ended July 28, the parent company of the Macy’s and Bloomingdale’s chains said Wednesday that profit rose to $279 million, or 67 cents a share, compared with $241 million, or 55 cents, a year earlier. That beats expectations of analysts surveyed by Thomson Reuters who predicted 64 cents a share.
Sales totaled $6.12 billion, a 3% increase over the same quarter a year earlier. Same-store sales, or sales at stores open at least a year, also rose 3%. Online sales surged 36%.
Chief Executive Terry Lundgren said the Cincinnati company’s better-than-expected earnings have inspired confidence going into fall about “our ability to grow sales and capture market share, especially in the holiday season.”
“This indicates that our business continues to have forward momentum, even with challenges that include a soft economy, lower spending by international tourists and temporary disruptions” involving the revamp of Macy’s flagship Manhattan store, Lundgren said in a statement.
Macy’s has weathered the recession better than rivals such as J.C. Penney in large part because of its localization initiative implemented three years ago, which tailors store merchandise to suit customer tastes and preferences by market. In Westminster, for example, Macy’s has increased its stock of smaller sizes to better serve the store’s many Vietnamese shoppers, while at South Coast Plaza in Costa Mesa the retailer has upped its variety of high-end designer apparel.
The company is also attracting shoppers with exclusive brands such as the Material Girl line designed by singer Madonna and her daughter Lourdes.
The company also raised its full-year earnings forecast to $3.30 to $3.35 a share compared with the previous guidance of $3.25 to $3.30.
Shares of Macy’s rose $1.01, or 2.7%, to $38.01 in trading Wednesday.
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