HomeWorld Business Magazine, homeworldbusiness.com | The Newspaper For Housewares Decision Makers

Macy's Reports Fifth Consecutive Year Of Earnings Growth

Tuesday February 25th, 2014 - 10:19AM


Macy’s, Inc. reported continued sales and earnings growth in the fourth quarter and full year 2013, ended February 1, 2014. In its guidance for 2014, the company reported that it expects continued improvement in sales and earnings in the coming year from its core business strategies— My Macy’s localization, Omnichannel integration and Magic Selling— which are known by the acronym of M.O.M.

Fourth quarter 2013 earnings were $2.16 per diluted share. This represents an increase of 18% over the comparable period a year ago. Comparable sales for the fourth quarter of 2013 grew by 1.4%, and by 2.3% for comparable sales combined with comparable sales from departments licensed to third parties.

For the full year 2013, earnings were $3.86 per diluted share, Macy’s reported. This represents an increase of 19% over fiscal 2012. The $4 per share exceeds management’s initial guidance provided at the beginning of the year for earnings per share to be in the range of $3.90 to $3.95 per share in fiscal 2013. Comparable sales for fiscal 2013 grew by 1.9%, and by 2.8% for comparable sales combined with comparable sales from departments licensed to third parties.

“Macy’s, Inc. had a strong year in 2013. This was our fifth consecutive year of double-digit growth in earnings per share and our fourth consecutive year of comparable sales growth. In fact, our total sales have grown by more than $4.4 billion in the past four years,” said Terry Lundgren, chairman, president and CEO of Macy’s, Inc.

“Our company’s comparable sales together with comparable sales from departments licensed to third parties rose by 4.3% in the combined November/December holiday shopping period and November/December comparable sales were up by 3.6%. While we had expected a sales decline in January because of the calendar shift, the month was down further than we had expected and we are very disappointed with sales performance in January,” he added.

In part, poor January sales were due to the unusually harsh winter weather across much of the country. At one time or another during January, 244 Macy’s and Bloomingdale’s stores were closed because of weather, and the business remained sluggish until Valentine’s Day,” he said. “Once warm spring weather arrives and our full assortment of fresh spring merchandise is in place, we believe customers will return to a more normalized pattern of shopping.”

Lundgren also touted the “competitive advantage” that Macy’s Inc. has in combining localization, omnichannel and enhanced customer engagement. He noted that “customers are able to shop for and buy the products that they want and prefer in our stores, via mobile devices and on computers in a shopping environment that delivers outstanding value and is supported with great service.”

“Our M.O.M. strategy is enabled by a unique organizational structure which is unlikely to be copied by our competitors because of the financial resources and talent required. We have been developing M.O.M. for years, and it is an enduring formula that we believe continues to hold significant promise for the future,” he concluded.

Macy’s Inc.’s sales in the 13-week fourth quarter of 2013 totaled $9.202 billion, down 1.6% from total sales of $9.350 billion in the 14-week fourth quarter of 2012. On a comparable sales basis, Macy’s, Inc.’s fourth quarter sales were up 1.4% in 2013 over 2012. Together with sales from departments licensed to third parties, fourth quarter 2013 sales on a comparable basis were up 2.3%

For the 52 weeks of 2013, Macy’s, Inc. sales totaled $27.931 billion, up 0.9% from total sales of $27.686 billion in the 53 weeks of fiscal 2012. On a comparable sales basis, Macy’s, Inc.’s 2013 sales were up 1.9% in 2013 over 2012. Together with sales from departments licensed to third parties, 2013 sales on a comparable basis were up 2.8%.

The company’s comparable sales include net sales from stores open at least one full fiscal year, as well as online sales at macys.com and bloomingdales.com.

In fiscal 2013, the company opened six stores and closed seven stores. Macy’s opened new stores in Victorville, CA, and Gurnee, IL, as well as a replacement store in Bay Shore, NY, and new men’s store in Las Vegas, NV. Bloomingdale’s opened a new store in Glendale, CA, and a new Bloomingdale’s Outlet store in Rosemont, IL. As previously announced, Macy’s closed stores in Mesa, AZ; Overland Park, KS; Florissant and St. Louis, MO; Irondequoit, NY; and Murray, UT. The Macy’s men’s and furniture store in downtown Sacramento, CA, was consolidated into a nearby full-line store.