Macy's Q3 same-store sales fall 20%; eyes COVID holiday impact, possible store closures
Macy’s Inc. reported a narrower-than-expected third-quarter loss but its sales fell as spending declined on apparel and accessories amid the pandemic. It also sounded a warning note about rising COVID-19 cases nationwide.
“COVID is surging again across the country,” CEO Jeff Gennette said during the company's earnings call with analysts. “And that continues to impede our recovery, in international tourism and urban areas."
Similar to other retailers, Macy's faces possible temporary store closures again in some locations due to the pandemic. It has closed its location in El Paso, Texas, a recent hotspot for COVID-19 cases. Macy’s is monitoring other areas closely, Gennette told analysts, and has a plan to work through additional store closures should they be needed.
“Our teams are executing well and have shown the flexibility and agility to adjust plans and provide a great omnichannel experience to our customers," he stated.
The department store giant reported a net loss of $91 million, or $0.29 per share, for the quarter ended Oct. 31, compared to net income of $2 million, or a penny per share, in the year-ago period. The adjusted loss for the quarter was $0.19 per share, compared to Street expectations of $0.83 per share loss.
Sales fell to $3.99 billion, topping analysts estimates of $3.91 billion, from $5.17 billion last year. Digital sales rose 27%.
Comparable sales were down 21% on an owned basis, and fell 20.2% on an owned-plus-licensed basis.
“Our results were driven by disciplined cost management, strong execution by our colleagues and an early start to the holiday shopping season,” Gennette said in a statement. “Customers shopped our brands across all channels in the third quarter and responded well to our expanded fulfillment offerings, such as curbside, store pickup and same-day delivery.”
Gennette noted that consumers spending has shifted to more casual apparel as consumers spend more time at home. Several categories, including home furnishings, jewelry and fragrance, generated double-digit sales growth compared to last year, he said.
As to the holiday, Gennette said that Macy’s has the “right gifting assortment with newness from value to luxury, and our expanded fulfillment options allow customers to shop safely and conveniently, in store or online.”
“We continue to watch the resurgence of COVID-19 and its potential impact on our business,” Gennette said. “Our teams are executing well and have shown the flexibility and agility to adjust plans and provide a great omnichannel experience to our customers.”