The Macy's earnings call was a platform for the company's executives to express both their concerns and optimism to their investors. CEO Jeff Gennette referenced the company's financial performance, revealing a 7.9% decrease in net sales, and a 6.7% decrease in comparable sales across both owned and licensed businesses. However, Tony Spring, another speaker on the call, highlighted the company's triumphs amidst these figures, namely in the sales of beauty products like fragrances and prestige cosmetics, women's career sportswear, and men's tailored clothing. Conversely, he expressed concern over several struggling areas like women's casual sportswear, big-ticket items, and handbags.
Macy’s third quarter results were better than expected, with their sales, gross margin, and SG&A rates outpacing projections. Furthermore, a 6% year-on-year decrease in inventory signaled a promising transition into Q4. However, pain points such as women's casual sportswear, big-ticket items, and handbags still present considerable challenges for the company's financial rebound.
Victories were not exclusive to Macy's retail sector. Spring announced that they saw promising sales in several other areas of their business. Off-price division, Backstage, luxury brand Bloomingdale's, and Bluemercury (a skincare and cosmetics subsidiary of Macy's) have all experienced robust growth, with Bluemercury celebrating their 11th quarter of positive sales results.
Macy's also used their earnings call to express their future strategy for overcoming their current hardships. Among potential solutions, the company expressed interest in increasing their investment in private brands, launching new brands such as On 34th, and expanding their existing I.N.C brand. They also plan on investing in their digital marketplace, introducing smaller-format stores, and employing personalized retail offers and outreach to their consumers. Macy's is hopeful that these initiatives will guide them to low single-digit sales growth by 2024.
Despite encountering obstacles in several business sectors, Macy's noted their various victories on the earnings call. They also detailed a hopeful strategic plan to overcome their current struggles. By investing in private brands, embracing digital options, and streamlining their retail outreach, the company intends to bolster their current financial situation and usher in a period of sustained growth.
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PSFK Earnings Call Podcast: Macy's - M