NEW YORK – Just 90 days into its “Bold New Chapter” strategy, Macy’s is encouraged by sales at a group of pilot stores serving as laboratories for its new initiatives.

The test group of Macy’s department store locations, called First 50 stores, outperformed during the first quarter “and are a leading indicator for our go-forward fleet,” said Macy’s Inc. Chairman and CEO Tony Spring.

Within those Macy’s stores, the company has improved merchandising in key areas and added in-store events while rolling out new apparel brands or expanding key apparel labels. The retailer is also using technology to improve conversion by, for example, pinpointing times when it is most important to have associates on hand in the shoe department, in big-ticket areas or in the fitting rooms.

Where store closings stand

During the company’s first quarter earnings call with investors this morning, executives did not provide much detail about the plan to close 150 Macy’s store locations by 2026. Earlier, the company said it would shutter 50 units this year, and that work appears to be well underway.

“We’re certainly encouraged by the deal making activity,” said Adrian Mitchell, COO/CFO. “We’re focused on getting the right price.”

Overall, Macy’s Inc. beat Q1 estimates. Net sales declined 2.7% to $4.85 billion, near the high end of the company’s outlook and outpacing Wall Street’s consensus forecast. Consolidated comp down 1.2%.

The company topped both its own and analysts’ expectations on the bottom line even though net income fell 60% to $62 million, or 22 cents per diluted share.

Gauging consumer sentiment and raising guidance – cautiously

Customers across all three company nameplates – Macy’s, Bloomingdale’s and Bluemercury – continue to benefit from strong wage and job growth, said Spring.

“However, inflationary pressures persist, and they’re feeling that pinch,” he added. “Our outlook assumes our customers will continue to scrutinize their discretionary purchases.”

Macy’s Inc. today revised its full-year guidance, raising expectations for adjusted earnings per share to a range of $2.55 to $2.90 from previous guidance of $2.45 to $2.85.

It also narrowed the range for full year net sales, which are now expected to land between $22.3 billion and $22.9 billion. Originally, Macy’s Inc. forecast net sales of $22.2 billion to $22.9 billion.

See also:

• Effort to privatize Macy’s quietly rolls forward
• Kerplunk. Macy’s home sales drop below 2019 benchmark

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