Is Macy’s for real?
Macy’s CEO Jeff Gennette has been saying that the department store company he leads is a different and better retailer than it has been in the past. The chain’s most recent quarterly results don’t appear to do anything to disprove that assertion.
The company reported a 12.8 percent increase in first-quarter same-store sales as its namesake chain posted a 10.7 percent gain and Bloomingdale’s sales jumped 28.1 percent. The two chains saw significant gains in active shoppers — 44.4 million shopped at Macy’s, a 14 percent gain, and four million at Bloomie’s, a 21 percent improvement.
Mr. Gennette, speaking yesterday on the company’s earnings call, said that Macy’s benefited from gains in “occasion-based apparel” as its customers attend more social events and return to offices to work. This development, similarly to what Nordstrom reported earlier in the week, led to increased foot traffic in Macy’s stores.
Macy’s continues to double down on its omnichannel strategy with a focus on personalization.
“We’re starting to see the results of this personalization work, with revenue driven by personalized product recommendations up 13 percent during the quarter,” said Mr. Gennette. “While we’re still in the early innings of these initiatives, we’re pleased with these results. And we continue to test and iterate to find the best communication channels, frequency, messages and offers.”
Macy’s CEO said the chain saw an increase in the number of customers actively using its mobile app of 14 percent, rising to 7.4 million in the last quarter.
He also said that progress was being made on the launch of Macy’s online marketplace, which is scheduled to go live in the third quarter.
The chain’s offprice Backstage store-within-a-store concept is a growing contributor to Macy’s results. The concept posted high single-digit comp gains compared to 2021. Macy’s is in the process of opening 37 new Backstage shops, including one in its Herald Square flagship. The retailer now operates more than 300 of the shops.
Mr. Gennette said that the retailer was also enhancing its merchandise.
“We’re putting a lot of focus here as we look to engage more customers and grow our market share.” he said. “We are in the early stages of reimagining our private brand portfolio and realigning our private brand team under new leadership in partnership with our broader merchandising and sourcing teams. Our goal is to have a private brand portfolio that is differentiated, defendable and durable.”
- Macy’s, Inc. Reports First Quarter 2022 Results and Raises Earnings Guidance – Macy’s, Inc.
- Macy’s (M) Q1 2022 Earnings Call Transcript – The Motley Fool
- Has Macy’s become a different and better retailer? – RetailWire
DISCUSSION QUESTIONS: Are you becoming a Macy’s believer? Where do you see the biggest needs and opportunities facing the company at this time?