Macy’s 2Q Sales Are Down 2.6%, But Terry Lundgren is Optimistic

Macy’s second quarter sales decreased 2.6%, but chairman and CEO Terry Lundgren was optimistic in a press release the company issued on Wednesday morning, even though he added that sales for the fiscal year will probably be down 1%.

“We expect an improvement in trend beginning in the second half of 2015 based on a range of promising new strategic initiatives, including those initially announced in January, which we believe will transform our company in the years ahead,” Lundgren said.

Here’s a look at some of the things Macy’s is looking doing to do to position itself both short-term and long-term:

  • Accelerating progress in the company’s ecommerce business through integrated omnichannel buying and planning of merchandise, as well as more strategic placement of inventories in stores and online fulfillment centers. Expanded markets for same day delivery, as announced last week through its partnership with Deliv, and nationwide buy online pick up in store provide Macy’s and Bloomingdale’s customers more options than ever.
  • Piloting the first six Macy’s Backstage off-price stores in metro New York City, as previously announced, beginning in September. All are expected to be in full operation for the holiday season. Additional Backstage store locations are expected to be rolled out beginning in 2016, based on learnings and customer response to the pilots.
  • Opening another 10 Bluemercury free-standing specialty beauty and spa locations before the end of 2015, bringing its store count to 76. In addition, Bluemercury is using Macy’s, Inc.’s omnichannel and digital expertise to improve its ecommerce offering and drive online sales, and four Bluemercury stores within Macy’s locations will be opened this fall.

As for the second quarter, Lundgren said results were impacted by a variety of factors, both internal to the company and in the macroeconomic environment. For example, there was the first-quarter port slowdown, which meant planned markdowns in many departments were delayed into the second quarter to clear merchandise that arrived late. Also, Lundgren said overall consumer demand has been restrained in many of the categories of merchandise Macy’s sells, and the strong U.S. dollar has led to significantly lower international tourist spending.

Plus, internally, Macy’s removed a major Friends & Family promotional event from its calendar, and that had previously drawn additional traffic to its stores.

Tim Parry is the Managing Editor of Multichannel Merchant.

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