US: Macy's reports solid Q1 in challenging environment
- Q1 net profit grows 3.2%
- Gross margin narrows to 38.9%
- Sales fall 1.7%
Macy's CEO Terry Lundgren said business trends were soft in January through March
Macy's delivered solid results in a challenging retail environment, an analyst has said, despite the US department store retailer booking a drop in first-quarter sales and narrowing margins.
In the three months ended 3 May, net profit totaled US$224m. This was an increase of 3.2% on earnings of $217m a year earlier.
Gross margin narrowed slightly to 38.9% from 38.8% in the prior year quarter.
Sales, however, were down 1.7% to $6.28bn. On a comparable sales basis, revenues dropped 1.6%. Together with sales from departments licensed to third parties, first quarter sales on a comparable basis were down 0.8%.
Macy's CEO Terry Lundgren said business trends were soft in January through March, but improvements were seen in April when the weather began to turn in northern climate zones.
"We see this as a good sign moving forward into the second quarter. In addition to weather, first quarter comparisons were negatively impacted by a calendar shift for our popular 'friends & family' event and the fact that we were up against a very strong first quarter last year," he added.
Macy's said it has a positive outlook for 2014 and reaffirmed its full-year guidance of comparable store sales growth of 2.5-3%, and earnings per diluted share of $4.40-4.50.
Stifel analyst, Richard Jaffe, said: "The company indicated that sales trends improved in April when the weather moderated, leading us to believe merchandise in stores is on-trend and pent up demand will likely help drive traffic in 2Q.
"We believe the development of more trend-right, fashion product will drive positive comp sales longer term."
Help test our new apparel sourcing tool.
Functional textile specialist Sympatex Technologies is the latest company to join the Sustainable Apparel Coalition (SAC), with plans to use the group's sustainability measurement tool, the Higg Index...
A US court has upheld a law banning 'Made in USA' label on products containing foreign parts, and has rejected a motion to dismiss by retailer Macy's and denim company Citizens of Humanity....
- US apparel sector braces for potential cost hikes
- Trade Tracker – Trump's first weeks, Brexit agenda
- Vietnam grows share of US apparel imports in 2016
- Key trade issues facing US textiles and apparel
- Does a hard Brexit mean hard times for UK fashion?
- Bangladesh "high threat" for terrorist activity
- VF Corp sees Q4 and FY earnings tumble
- Sales at US clothing retailers jumped in January
- Ralph Lauren new execs to support Way Forward Plan
- US Q4 in brief – VF Corp, Kate Spade, Rocky Brands
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective
- Technical textile markets: product developments and innovations, December 2016
- Global market review of lingerie – forecasts to 2022
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar