American retailer Macy's net sales at $5 bn in Q1 FY23

Macy's and Bloomingdale's, both prominent nameplates in the company, also saw a decrease in their comparable sales. Macy's saw an 8.7 per cent reduction on an owned basis and a 7.9 per cent drop on an owned-plus-licensed basis. Bloomingdale's suffered a 3.9 per cent fall in comparable sales on an owned basis and a 4.3 per cent drop on an owned-plus-licensed basis.

Furthermore, 70 per cent of Macy's brand comparable owned-plus-licensed sales were made up by the Star Rewards programme members, indicating an approximately 1 percentage point increase versus the prior year. Both Macy’s and Bloomingdale’s saw strength across their apparel categories, the company said in a press release.

Macy's reported $191 million in other revenue in Q1 FY23, marking a $26 million decrease from the previous year. This revenue category, which represented 3.8 per cent of net sales, mainly resulted from credit card revenue net, reflecting the impact of higher bad debt within the portfolio.

Inventory turnover, as per the trailing twelve-month basis, was down 2 per cent in Q1 FY23 compared to Q1 FY22 but up 14 per cent compared to FY19. Merchandise inventories were down 7 per cent YoY and down 16 per cent compared to FY19.

Macy's reported an improved gross margin rate for Q1 FY23. The gross margin rate stood at 40 per cent, up from 39.6 per cent in the first quarter of FY22 and a significant improvement of 180 basis points from the first quarter of FY19.

However, the selling, general, and administrative expenses rose by $45 million, resulting in an expense of $2 billion. The selling, general, and administrative expense ratio as a percent of total revenue was 37.7 per cent, a steep climb of 350 basis points compared to the first quarter of FY22.

“During the first quarter, we delivered a solid beat on our gross margin rate and bottom-line expectations enabled by our disciplined teams, strength of our inventory management and operational efficiencies. We planned the year assuming that the economic health of the consumer would be challenged, but starting in late March, demand trends weakened further in our discretionary categories,” said Jeff Gennette, chairman and chief executive officer of Macy’s.

Fibre2Fashion News Desk (DP)