Macy’s CEO says recent gains are real and better things are ahead
Macy’s reported a 63.9 percent gain in same-store sales during the first quarter as shoppers returned to stores and online sales climbed upward.
The parent company of its namesake chain, Bloomingdale’s and Blue Mercury announced that all three outperformed sales expectations during the first quarter. Macy’s said its first quarter results represented a continuation of improvement picked up during its fourth quarter, when it saw sales improvement over the previous three months and reported an earnings gain for the first time in more than a year. Management also pointed to federal stimulus checks, the increase in COVID-19 vaccinations as well as significant progress on its three-year Polaris strategy, which includes digital investments, paying dividends.
Macy’s said that it was encouraged not only by the return of its core customers to stores but that it saw significant increases in new shoppers at the same time. The department store retailer said that 4.6 million new customers were acquired in the last quarter, representing a 23 percent jump over 2019. Among online shoppers, 47 percent bought from Macy’s websites for the very first time.
The company is looking for further improvement ahead.
“We don’t see this as a short-term pop,” Macy’s CEO Jeff Gennette said on the company’s earnings call this week. “There are pent-up demand opportunities in our categories that give us confidence for accelerated profitable growth in 2021 and beyond.”
The retailer said that categories that held up during the pandemic continued to show strength, with fragrances, jewelry and watches, home and luxury items among its strongest merchandise performers. It also saw a rebound in “special occasion” categories, such as travel-related products (luggage and swimwear), which were negatively affected by the COVID-19 outbreak.
Mr. Gennette said new merchandise categories are beginning to “emerge” for the retailer.
“We have the liquidity and flexibility in our inventories to respond to customer needs in categories like toys, pet, food and wine, health and fitness either through vendor direct or our owned inventory,” he said. “We’ve added hundreds of new brands and categories in apparel, home and beauty over the past year, allowing us to capture additional spend with new and existing customers.”
Macy’s has been “hyper-focused” on toys and its importance to Millennial parents, said Mr. Gennette. The chain’s toy business is small, but he sees “huge market share opportunities” for the category.
- Macy’s, Inc. Reports First Quarter 2021 Results – Macy’s, Inc.
- Macy’s Inc (M) Q1 2021 Earnings Call Transcript – The Motley Fool
- Macy’s says it will recover and rebuild coming off a tough 2020 – RetailWire
DISCUSSION QUESTIONS: Do you agree with Macy’s CEO Jeff Gennette that its improved first quarter performance was not “a short-term pop” for the retailer? Which of Macy’s initiatives does the retailer deserve credit for and which, if any, worry you as diverting its attention from areas needing more attention?