Q2 sales, earnings & cash flow exceed expectations, Macy's
Macy's, Inc. reported earnings of 35 cents per diluted share for the second quarter of 2010, ended July 31, 2010. This significant earnings increase over the second quarter of last year was driven by higher-than-expected sales, improved margins, a reduced expense rate and disciplined inventory management.
"We believe our business is beginning to hit its stride after implementing significant structural and organizational changes over the past two years. While the economic environment remains uncertain, Macy's and Bloomingdale's have a terrific opportunity to continue to take market share and grow our business profitably," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer.
"The improvement in our business is not the result of a single factor. Rather, our performance reflects a number of strategic initiatives that are working successfully and complementing each other. This includes My Macy's localization of merchandise assortments, centralization of key Macy's organizational functions, customer centricity activity, continued development of private brands, introduction of new exclusive market brands, improvement in associate selling and service skills, and integration of stores and online channels at Macy's and Bloomingdale's," he added.
"We are entering the fall season with tremendous momentum that has energized the exceptionally talented people in our company. We are motivated to continue to innovate, test new ideas, accelerate the penetration of distinctive and exclusive merchandise, and tailor our offering to the diverse customers who shop in our stores and online."
In the second quarter of 2009, Macy's, Inc. earned 2 cents per diluted share. These results include restructuring charges of $34 million ($77 million after tax; 18 cents per share) related to division consolidations and localization initiatives. Excluding these charges, the company earned 20 cents per diluted share in the second quarter of 2009.
For the first half of 2010, Macy's, Inc.'s diluted earnings per share were 40 cents, compared with a loss of 19 cents per diluted share in the first half of 2009. Excluding restructuring-related costs of $172 million ($97 million after tax; 23 cents per diluted share), earnings were 4 cents per diluted share in the first half of 2009.
Sales in the second quarter totaled $5.537 billion, up 7.2 percent from total sales of $5.164 billion in the second quarter of 2009. On a same-store basis, Macy's, Inc.'s second quarter sales were up 4.9 percent.
For the year to date, Macy's, Inc. sales totaled $11.111 billion, up 7.2 percent from total sales of $10.363 billion in the first 26 weeks of 2009. On a same-store basis, Macy's, Inc.'s year-to-date sales were up 5.2 percent.
Online sales (macys.com and bloomingdales.com combined) were up 28.1 percent in the second quarter and 31.0 percent in the first half of 2010. Online sales positively affected the company's same-store sales by 0.5 percentage points in the second quarter and 0.8 percentage points in the year to date. Online sales are included in the same-store sales calculation for Macy's, Inc.