New York—Macy’s Inc. today reported “disappointing” second quarter earnings with weaker-than-expected profits. The department store also lowered its full year outlook due to the prospect of softer sales, a move that pushed its shares down in trading.
For the quarter ended August 3, the parent to Macy’s and Bloomingdale’s stores posted only a 0.7% increase in its net profit to $281 million, or 72 cents a share, compared with a profit of $279 million, or 67 cents a share, a year earlier. Analysts’ average estimate had expected a more “robust” 78 cents a share.
Net sales edged downward 0.8% to $6.08 billion, missing analysts’ projections for $6.26 billion in sales. The company’s comparable store sales also missed: falling 0.8% instead of a 2.3% increase analysts’ anticipated.
‘Reflects Consumers’ Continuing Uncertainty’
“We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event,” said Terry Lundgren, chairman/president/ceo. “Even so, second quarter sales performance was softer than anticipated, and we are disappointed with the results. Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment. After a cool spring, we have taken appropriate markdowns and customers are responding favorably.”
Lundgren noted, however, that the company had seen a “strengthening of the sales trend in key elements of women’s ready-to-wear, a category which has lagged over the past couple of years.” Bloomingdale’s sales rebounded in the second quarter, too, he added.
In a conference call with analysts, Chief Financial Officer Karen Hoguet also noted that the company did not offer enough of the low-price merchandise shoppers were apparently looking for.
Heading into the back-to-school season, the stores are “capturing we are capturing incremental sales opportunities in childrenswear, activewear and Impulse apparel,” Lundgren said.
“We also have intensified Macy’s marketing support throughout the second half of the year to emphasize the fashion and value we deliver,” Lundgren said. “We believe we have the right strategies in place at Macy’s and Bloomingdale’s, particularly in the omnichannel and online initiatives that are driving our business to a new level of shopping accessibility for our customer.
Nonetheless, the retailer downgraded its earnings forecast for the year to $3.80 to $3.90, below its prior view of $3.90 to $3.95 and below analysts’ for $3.94 a share. Comparable store sales are expected to increase by 2.5% to 4%.
Analysts have been warning that consumers are feeling the pinch of higher payroll taxes and gas prices even as the job market has inched up somewhat.
“The sales environment is tough. The low-to-mid end customer is still struggling,” Brian Yarbrough, analyst at Edward Jones, said.
Still, Better Positioned than Other Department Stores?
“To see Macy’s miss by a wide margin is troublesome, speaking volumes about the health, or lack thereof, of middle America,” said Brian Sozzi, chief equities strategist for Belus Capital Advisors, told the The Associated Press.
Macy’s discouraging second quarter news may be a harbinger of what other department stores, such as Kohl’s and JCPenney, will be reporting within the next week.
In a research note earlier this week, Morgan Stanley analyst Kimberly Greenberger wrote that second quarter was generally tough for department store chains in part because of less mall traffic, particularly in July.
“We expect the stock to be weak today, but retain our ‘Buy’ rating, as we view this quarter as more of an isolated problem than a longer-term issue,” wrote Bank of America Merrill Lynch analyst Lorraine Hutchinson. “Among the mid-tier department stores, we think Macy’s Inc. is best positioned for the second half, given its exposure to top national brands and high center core concentration.”
Macy’s Inc. reported it spent about $446.7 million to buy back 9.2 million shares during the second quarter, leaving the company with about $2.2 billion remaining in its repurchase plan.
For commercial purposes, extract supplements can be obtained from the fruit of the pericarp. Garcinia cambogia reviews is performed by a physician Chen and Oz to prove that it is an herb for weight loss, a lot of research has been done. Studies, Garcinia cambogia extract supplementation decreases the weight of the body fat accumulation, was shown to have a positive effect on prevention. We are important substances such as cholesterol (LDL), reduces the serum leptin and triglycerides. In addition, it will increase the level of serotonin and cholesterol (HDL). The study also, Garcinia cambogia extract supplements, has proven that there are no significant adverse effects on many of the eight weeks, such as its use.