Macy’s revealed in a conference call announcing strong second-quarter financials that it is preparing to introduce a new home private label focused on addressing social issues.
Macy’s posted net income of $345 million, or $1.08 per diluted share, versus a net loss of $431 million, or $1.39 per diluted share, in the year-prior period.
Adjusted to include extraordinary items, Macy’s second-quarter net income was $411 million, or $1.29 per diluted share, versus a net loss of $251 million, or 81 cents per diluted share, in the year-earlier quarter.
Macy’s readily topped an Yahoo Finance-published analyst average earnings per share estimate of 14 cents.
Comparable sales gained 61.2% on an owned basis and up 62.2% on an owned plus licensed basis as compared to the 2020 quarter, and they gained 5.8% on an owned basis and 5.9% on an owned plus licensed basis versus the 2019 period.
Net sales were $5.65 billion versus $3.56 billion in the year-before period, Macy’s reported, while operating income turned positive, to $597 million versus an operating loss of $631 million for the period year over year.
Analysts on average expected second quarter sales of $4.98 billion.
Digital sales slipped 6% versus the year-previous quarter but grew 45% versus the 2019 period, Macy’s indicated. Digital penetration was 32% of net sales, which represented a 22 percentage point decline from the 2020 second quarter, but a 10 percentage point increase over the 2019 quarter. The year-over-year decline in digital sales in the quarter resulted from the shift of omnichannel customers to stores, Macy’s asserted.
According to Macy’s, pandemic impacted categories, including denim, luggage, dresses and other occasion-based apparel, came back strong in the second quarter, while categories that were strong throughout the pandemic, including fragrance, fine jewelry and textiles, continued to perform well.
In the conference call, Jeff Gennette, Macy’s chairman and CEO, pointed to home as a department that has done well during the pandemic. Macy’s plans to energize the momentum with a new private label, Oak, designed to draw socially conscious home goods consumers. An extension of the own-brand expertise Macy’s developed with home goods labels such as Hotel Collection, the Oak rollout will feature the introduction in a few week of a new website Macy’s has developed to highlight its range of environmentally friendly products, Gennette said.
“Second-quarter results were strong across all three nameplates and surpassed our expectations,” Gennette said. “Our momentum in the first quarter accelerated in the second quarter as we successfully reengaged core customers and attracted new, younger customers with new brands and categories. Through the Macy’s, Inc. portfolio and our omnichannel approach, we provide a compelling, seamless integration between physical stores and digital shopping to most effectively meet the needs of our customers.”