Macy’s Posts Net Profit Decline, But on Track Meeting Goals
From softness in women’s wear to the threat of tariffs on apparel, Macy’s Inc. has plenty of challenges and hurdles ahead. But the department store remains on track meeting financial goals and maintaining a healthy balance sheet, is off to a “good start” to 2019 and has a “clear line of sight into profitability growth.” That was the main message from Jeff Gennette, chairman and chief executive officer of the $25 billion department store chain, which on Wednesday reported a slight decline in net profits during the first quarter due to an 80 basis point drop in margins including higher delivery costs and a slight increase in SG&A. Further margin compression is expected, though not as bad in the second quarter, resulting from markdowns to clear out higher than expected spring inventories. On the brighter side, comparable sales rose 0.7 percent and earnings on a per share basis at 44 cents beat Wall Street estimates by 10 cents. Last year, the company earned 48 cents in the quarter. There was also a $43 million lift from asset sales, involving a few stores. “Overall, the quarter met our expectation and we are on track for our annual top line and bottom line guidance,” Gennette told
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