Macy’s Q1 earnings fell short of last year’s, disappointing investors. For the 13-week period ended May 2, 2015, earnings were 56 cents per diluted share, as compared to 60 cents in 2014 Q1. Sales in the first quarter of 2015 totaled $6.232 billion, a decrease of 0.7% compared with sales of $6.279 billion in the same period last year. Comp sales on an owned plus licensed basis were down by 0.1% in the first quarter.
Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer blamed the shortfall on delayed shipments from the West Coast port slowdown, severe winter weather early in the quarter, plus reduced spending by international tourists at Macy’s and Bloomingdale’s flagships in New York City, Chicago, Las Vegas and San Francisco.
Macy’s announced a 15% increase in its dividend and a $1.5 billion increase in its stock-buyback program.
Looking forward, Lundgren cites optimism about the upcoming launch of Macy’s Backstage off-price business this fall, which is opening with four doors in the New York metropolitan area later this year. Macy’s will be going head to head with other discounters like T.J. Maxx, Marshalls, Nordstrom Rack and more.
“Looking ahead, we have many reasons to be encouraged about the growth prospects for our business. We are excited by the range of new initiatives being put in place today – both organic and through our new business development organization. Within our existing business, this includes an intensification of focus in our Top 150 stores, major growth trends in active categories and accelerating success in dresses, the vanguard merchandise category in our omnichannel reorganization. The launch of our new Plenti loyalty rewards program last week was very strong, far exceeding our expectations. Our new Thalia Sodi private brand in ready-to-wear, shoes and fashion jewelry clearly is resonating with customers and selling very well,” Lundgren said.