Macy's has reported a return to profitability in the second quarter, although it continues to face challenges with declining sales. The company's profit for the three-month period ending August 3 was $150 million, or 53 cents per share, surpassing Wall Street expectations. This marks a significant improvement from the loss experienced in the same period last year.
However, despite the positive bottom line, Macy's saw a nearly 4% decrease in sales, totaling $4.94 billion, down from $5.13 billion in the previous year. Comparable sales, which include online channels and established stores, dropped by 3.3%, with Macy's stores experiencing a 3.6% decline and Bloomingdale's a 1.4% decrease. In contrast, Bluemercury saw a 2% increase in same-store sales.
The company attributes the sales decline to a more cautious consumer base, focusing on essential purchases amid inflationary pressures. As a result, Macy's has adjusted its annual sales forecast downward and plans to implement more sales strategies to attract customers.
In an effort to revamp its performance, Macy's has initiated plans to close 150 stores over the next three years and modernize its remaining 350 locations. The company has also shifted its focus towards luxury sales, with intentions to open 15 upscale Bloomingdale's stores and 30 luxury Bluemercury cosmetics locations.
Despite reaffirming its annual earnings per share outlook, Macy's revised its projected annual net sales to be between $22.1 billion and $22.4 billion, lower than previous estimates. Comparable sales, including licensed businesses and marketplace, are expected to decline by 2% to 0.5%, a more pessimistic outlook compared to earlier projections.
Macy's recent decision to terminate buyout talks with investment firms due to inadequate bids and uncertain financing reflects the company's commitment to managing its own turnaround efforts. With a new chairman and CEO at the helm, Macy's remains focused on adapting to evolving consumer trends and enhancing its retail offerings to drive future growth.
