Port slowdown and winter weather hit Macy's Q1
- Q1 profit declines 13.8% to $193m
- Sales slip 0.7% to $6.23bn
- Analyst confident for Macy's outlook
Macy's net profit fell 13.8% during the quarter
Delayed product shipments from the west coast port slowdown combined with severe winter weather have resulted in a double-digit first-quarter profit decline for US department store retailer Macy's.
Net income amounted to US$193m for the 13 weeks to 2 May, compared to $224m in the same period of the prior year.
Sales edged down 0.7% to $6.23bn from $6.28bn last year, while comparable store sales slipped by 0.7%. The company said sales were also hampered by lower levels of spending by international tourists.
Gross margin, however, increased 10 basis points to 39% from 38.9% a year ago.
Chairman and CEO Terry Lundgren said the omnichannel reorganisation in Macy's merchandising, planning and marketing organisations also caused some temporary disruption as executives learned new roles and procedures.
But, he added: "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 organisation."
The initiatives include an "intensification of focus" in its top 150 stores, major growth trends in active categories and accelerating success in dresses, which Lundgren says is the "vanguard" merchandise category in Macy's omnichannel reorganisation.
Stifel analyst Richard Jaffe said: We believe Macy’s continued focus on improving the customer shopping experience through both ease of shopping and through a better product assortment, will continue to help the company gain share and drive sales profitably."
The United States Fashion Industry Association (USFIA) has elected Michael Singer, vice president of customs and social compliance for Macy's Merchandising Group, as its new chairman....
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