Macy’s continues its online growth in Q3
November 11, 2016 10:23 AM
Once again, online sales grew while overall sales fell for Macy’s Inc.
Macy’s, No. 6 in the Internet Retailer 2016 Top 500 Guide, does not break out online sales, but chief financial officer Karen Hoguet told analysts on the retailer’s fiscal third quarter earnings call that online sales grew by double digits for Macys.com and Bloomingdales.com. Macy’s reported overall sales of $5.626 billion for the quarter ended Oct. 29, down 4.2% from $5.874 billion last year. It marked the third straight quarter of declines in fiscal 2016.
Though e-commerce is buoying flagging store sales, Hoguet says she views the stores as complimentary to the retailer’s online presence and key to helping Macy’s compete with Amazon.com Inc. (No. 1 in the Top 500 Guide).
The department store chain’s ability to “find the right product” gives it a competitive advantage over Amazon, she told analysts on the call, according to a transcript from Seeking Alpha. “When you combine that with the really terrific store organization that we have, I do believe for fashion, customers still love going into the stores, trying things on. Even if they end up buying online from our apps, they still experience the store. And so I think both of those will allow us to always compete effectively against an Amazon.”
In August, when it reported fiscal second quarter results, Macy’s said it would close 100 stores, or 13.7% of its store base, as a cost-cutting measure within the next year.
In September, Macy’s announced it planned to bet big on e-commerce during the holidays, hiring 15,000 e-commerce-related seasonal employees, up 25% year over year. On Thursday, Hoguet hinted there will be changes to the retailer’s free shipping threshold during the holiday season. The retailer currently offers free shipping on online orders over $50.
“There is going to be a lot of reduced shipping thresholds offered throughout the holiday season, but relatively comparable to a year ago,” she said on the call. Last year, Macy’s offered free shipping on online orders over $25 on Black Friday.
For the third quarter ended Oct. 29, Macy’s reported:
- Net sales of $5.626 billion, down 4.2% from $5.874 billion in the year-ago quarter.
- A year-over-year comparable sales decline of 3.3%.
- Net income of $15 million compared with $117 million.
For the first nine months of fiscal 2016, Macy’s reported:
- Net sales of $17.263 billion, down 5.2% from $18.210 billion in the year-ago period.
- A year-over-year comparable sales decline of 4.0%.
- Net income of $139 million compared with $527 million.