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Macy’s posts double-digit growth in web sales as total sales fall in Q1

May 11, 2016 03:46 PM
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Web sales keep growing for Macy’s Inc. But that was about the only bright spot in the first quarter for the department store chain that is No. 6 in the Internet Retailer 2016 Top 500.

Total revenue declined 7.4% and comparable-store sales were down 5.6% in the quarter that ended April 30. The closing of 41 stores in 2015 accounts for the larger decline in total revenue versus same-store sales.

Chief financial officer Karen Hoguet reiterated in a call with investment analysts that Macy’s will continue to pursue an omnichannel strategy of linking its bricks-and-mortar stores with its websites, Macys.com and Bloomingdales.com, and its mobile sites and apps.

“We are absolutely not pulling back our commitment to digital and omnichannel retailing. Mobile remains a very high priority, and we continue to invest,” Hoguet said, according to a transcript provided by Seeking Alpha. “We are continuing to see double-digit year-over-year sales increases in online sales. While we have already somewhat downsized our fleet of stores, we continue to see value and opportunity in physical locations that sync with desktops, websites, apps and mobile in giving customers choices and meeting demand in new and different ways.”

Hoguet also pointed out that Macy’s recently had been ranked “as the sixth largest online retailer in America,” an apparent reference to the 2016 Top 500 Guide released last month. Macy’s does not report its online sales separate from total sales, saying that the way consumers move between stores and the web today blurs the line between store and online sales.

Asked by an analyst whether the price transparency made possible by the Internet was affecting Macy’s results, Hoguet agreed there may be an impact and that Macy’s is responding by introducing more merchandise that other retailers do not sell. “One of the things we're all focusing on is having more exclusive merchandise that you could only get at Macy's and you can't price-compare it as easily, but also giving the customer just a better experience so that she's more likely to come in and buy from us at regular price,” she said.

For the fiscal first quarter ended April 30, Macy’s reported:

  • Sales fell 7.4% to $5.771 billion from $6.232 in the same quarter a year earlier.
  • Net income declined 40% to $115 million from $193 million.
 

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