By Phil Wahba
August 10, 2017

Macy’s (m)is taking its victories where it can.

On Thursday, the department store chain said comparable sales fell 2.8% in the second quarter, the 10th straight quarter of decline for the retailer.

That said, the results were not as bad as investors had feared. Wall Street had predicted comparable sales would drop by 3.5%, according to Consensus Metrix. (Comparable sales exclude recently opened or closed stores.) And profit by one measure came in at 48 cents a share, better than the 45 cents analysts were projecting. Total net sales fell 5.4% to $5.55 billion, slightly above expectations.

Despite the not-as-bad-as-expected results, Macy’s did not raise its full year forecast, which suggests the retailer views these improvements as fragile. Investors were sufficiently spooked: Macy’s shares were down 2% in premarket trading to $22.50, about half the level of their 52-week high.

The country’s largest department store has been grappling with a shopper exodus to rivals like Amazon.com (amzn), which this year could eclipse the company as an apparel retailer, TJX Cos’ T.J Maxx and Ulta Beauty. (ulta) Macy’s is closing dozens of stores this year in order to focus on its better-performing properties. At the same time, it is pouring billions into e-commerce (it’s currently the sixth largest e-commerce retailer in the U.S.)

But Macy’s has been hurt by weakness in the apparel industry, its biggest category, and the sameness of merchandise across department stores, which has forced the retailer to resort to deep discounting. What’s more, shopper traffic at many malls is in free-fall. In response, Macy’s, which named a new CEO earlier this year, is working on a number of initiatives, from leaner inventory management, to lining up more exclusive merchandise, to expanding its T.J. Maxx-Like concept Backstage.

The retailer will introduce a new loyalty program later this year as it shifts its marketing resources away from discounting. The goal is to become a “fashion authority,” to quote Macy’s CEO Jeff Gennette.

But even Gennette acknowledged that Macy’s turnaround efforts won’t be quick or easy. “We are working with a mindset of continuous improvement and will adapt our business in order to reach our goal of stabilizing the brick-and-mortar business while investing for accelerated growth in digital and mobile,” Gennette said in a statement. “There is still work ahead of us, however.”

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