US: Macy's second-quarter net income surges 16%
US department store operator Macy's has lifted its full-year earnings forecast after its second-quarter net income surged on the back of strong revenue growth.
The company recorded a 15.76% rise in profit to reach US$279m over the three months ended 28 July. Sales increased 3% over the same period last year to reach $6.1bn. Same-store sales also increased 3%.
"We were pleased with our spring season results, and they came on top of exceptionally strong spring season performances in each of the past two years," said chairman, president and CEO Terry Lundgren.
"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 associated with the major remodelling of our Herald Square flagship store in New York City which was initiated in March."
"In response to these challenges, we have stayed very firmly focused on driving profitable sales growth while running the business with discipline to maintain margins and manage expenses."
Over the half-year, net income grew 23.6% to $460m as sales rose 3.7% to $12.3bn. Same-store sales also increased 3.7%.
On the back of the strong results, the company has increased its full-year forecast, expecting earnings to reach $3.30-3.35 a share, up on prior guidance of $3.25-3.30.
"We are entering the fall season with optimism about our ability to grow sales and capture market share, especially in the holiday season when shoppers naturally turn first to Macy's and Bloomingdale's," added Lundgren.
"The direction of the overall economy is outside of our control, so we will concentrate on what our company does best. We look forward to maintaining our holiday traditions, such as the Macy's Thanksgiving Day Parade, to help our country, our customers and our employees celebrate with family and friends.
"We feel good about our very strong brand-driven merchandise assortment for gift-giving and self-purchase this fall, as well as the creative and compelling marketing programs that will drive consumer interest and traffic in stores and online.
"Meanwhile, we will continue to maintain our expense discipline, especially in those areas that are not readily apparent to the customer."
He also said the company will take a scheduled break in the multi-year Herald Square store remodelling project to ensure shopping is not interrupted during the holiday season.
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