In the third quarter, Macy’s did better than Wall Street expected as digital sales and services such as curbside pickup helped boost revenues, and home furnishings gained.
However, Macy’s noted that the company is considering how it may need to respond to challenges confronting operations as the COVID-19 pandemic reasserts itself.
Macy’s posted a net loss of $91 million, or 29 cents per diluted share, in the quarter versus net income of $2 million or one cent per diluted share, in the period a year earlier. Adjusted for one-time events, net loss was $60 million, or 19 cents per diluted share, versus $21 million, or seven cents per diluted share, in the year-previous quarter. Zacks Investment Research offered an analyst consensus 81 cent loss estimate for the period.
Third quarter comparable sales slid 21% on an owned basis and 20.2% on an owned plus licensed basis year over year, Macy’s reported. At the same time, digital sales grew 27% over the 2019 period.
Net sales were $3.99 billion versus $5.17 billion in the quarter a year earlier. Operating loss was $127 million versus operating income of $52 million in the year-prior period.
Jeff Gennette, Macy’s chairman and CEO, said, “Macy’s, Inc. third quarter results reflect solid performance across all three brands, Macy’s, Bloomingdale’s and Bluemercury. Our results were driven by disciplined cost management, strong execution by our colleagues and an early start to the holiday shopping season. 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. Our digital business delivered strong growth and sales in our stores continued to recover. Customers have shifted their spending to casual apparel and categories they can enjoy as they stay at home. Several of these categories, including home furnishings, jewelry and fragrance, have generated double-digit sales growth compared to last year.”
Regarding the upcoming holiday season, Gennette said, “We know this year is different. We are committed to bringing the joy of the season to America as we do every year. From next week’s Thanksgiving Day Parade to reimagined family gatherings, we will help our customers and their families celebrate in style. We have 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. Our teams are executing well and have shown the flexibility and agility to adjust plans and provide a great omnichannel experience to our customers.”