June 5, 2009
Macy’s Inc. reported a 9.1 percent drop in same-store sales in May, as consumers continued to put off unnecessary spending.
The Cincinnati-based department store chain said sales at stores open at least a year are in line with management expectations. Total sales declined to $1.7 billion from $1.9 billion a year ago, or 9.5 percent.
For the year, Macy’s said its same-store sales declined by 9.1 percent, with total sales down 9.5 percent, to $6.9 billion from $7.7 billion.
Macy’s, like most retailers, has been struggling to attract parsimonious shoppers while not giving away the store through deep discounts, a strategy that erodes profit margins. But recent reports regarding rising manufacturing activity and home sales gave a lift to retail stocks earlier in the week, based on hopes that consumers may be encouraged to go out and splurge on a few summer items.
Total May retail sales were projected to drop by 3.6 percent, according to Retail Metrics, a Massachusetts firm that tracks store sales. This compares with a 2.7 percent decline in April. Department stores were forecast to post the weakest results, down 8.5 percent, with “discretionary spending still in hiding,” according to its monthly report.
The retailer has projected full-year profits of 40 cents to 55 cents per share, excluding restructuring costs stemming from its companywide reorganization, part of its My Macy’s merchandising program. That said, Macy’s hedged that it will beat this guidance if the economy improves in the second half of the year. Annual sales, it has said, are expected to decline by 6 percent to 8 percent, with spring expected to be weaker than the fall, in part due to stronger performances last spring.
Macy’s operates roughly 845 department stores under the names Macy’s and Bloomingdale’s.
Other retailers reporting recent sales figures:
• Target Corp. said its May same-store sales fell 6.1 percent from the same month a year ago. Total sales, at $4.56 billion, were down 2.3 percent from May 2008. Target has consistently posted monthly same-store sales declines during the recession, as consumers have pulled back their spending on clothes, home furnishings and some of the other discretionary items that had boosted the company’s sales during better times.
• Kohl’s Corp. said its comparable store sales in May decreased by 0.4 percent and total sales increased 4.1 percent, better than management had expected. The Menomonee Falls, Wis.-based retailer (NYSE: KSS) said Thursday sales for the four-week month ending May 31 were $1.26 billion, compared with $1.21 billion in the same period of 2008. Year-to-date sales also are ahead of 2008 at $4.9 billion, compared with $4.8 billion in 2008, an increase of 1.3 percent. Comparable store sales year-to-date decreased 3.2 percent, Kohl’s said.
• Gap Inc. said that its comparable-store sales were down 6 percent year over year in May, and net sales were down 5 percent to $1.03 billion. Gap North American and Banana Republic were hit the hardest in comparable-store sales — going down 11 percent and 14 percent, respectively. International sales were down 7 percent. Old Navy was the one Gap brand that saw an increase — It was up 3 percent.
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