Macy’s tempered its full year sales forecast after solid second quarter results and growing optimism around omnichannel initiatives weren’t enough to offset a slow start to the year.
Macy’s said sales increased 3.3% to $6.267 billion and same store sales increased 4% during the second quarter ended August 2. Excluding sales in departments licensed to third parties same store sales increase 3.4%. Profits increased to $292 million, or 80 cents a share, from $281 million, or 72 cents a share.
Despite the solid growth in sales and profits, and positive comments about its omnichannel strategy, Macy’s got off to a slow start in the first quarter due to extreme weather. As a result, the company bumped down its full year same store sales forecast to a range of 2% to 2.5% from an earlier forecast of 2.5% to 3%. However, it kept intact its full year profit forecast for earning per share in the range of $4.40 to $4.50.
Macy’s chairman and CEO Terry Lundgren said the company’s showing in the second quarter was the result of a rebound in shopping activity once weather patterns normalized. The company also benefited from a shift in a major promotional event that fell into the second quarter.
“We are approaching the second half of 2014 with confident optimism in our business strategies, merchandise assortments and marketing plans, tempered with the reality that many customers still are not feeling comfortable about spending more in an uncertain economic environment,” Lundgren said. “Thus, we remain focused on outperforming our competitors through innovation in omnichannel, which has added new dimensions in how consumers can shop us and how our company can satisfy customer demand.”
Macy’s now offers shoppers the capability to buy online and pick up in store at all its locations, according to Lundgren.
“Moreover, our Millennial strategies have sharpened our merchandising and marketing to customers in the age range of 13 to 30. This has created new positive energy as our customers begin back-to-school shopping,” Lundgren said.
Macy’s ended the second quarter with 840 stores in 45 states.