"The momentum from our fourth quarter of 2009 accelerated in the first quarter," Terry J. Lundgren, Macy's, Inc. chairman and CEO, says in its release. "Our first-quarter earnings were well ahead of what we originally expected. Macy's and Bloomingdale's both had an excellent quarter and outperformed most of their key competitors."
"Sales exceeded our expectations in virtually every market, at Bloomingdale's, and on the Internet," Macy's CFO Karen M. Hoguet says in a conference call. The strongest areas were men's and home, as well as sectors within women's clothing; the weakest were brands aimed at younger shoppers.
And while conceding that overall, the direction of the economy is unclear, the company outlined growth initiatives that it hopes will help the Cincinnati-based retailer increase its market share. Those include increased spending on multichannel integration strategies at both macys.com and bloomingdales.com, which gained 34% in sales this quarter. "We are continuing to expand our view of the Internet," she says, and the chain is experimenting with ways to allow shoppers to use both channels while in store.
The company also says it will open a new smaller-format Bloomingdale's this fall in Santa Monica, Calif., and it will unveil four new stores this fall for its new Bloomingdale's Outlet concept, first announced early this year.
Several weeks ago, the chain bumped up its forecast, saying it expects full-year sales to grow 3 to 3.5%, but did not announce any additional changes in Wednesday's results. "While we continue to see strong sales results, we don't want to get ahead of ourselves," she says.
Retailers Kohl's, Wal-Mart Stores, JC Penney and Target will all post their results in the coming days, and for the most part, observers are expecting good news, as evidence grows that consumers are feeling much more confident about family finances.
The just-released Deloitte Consumer Spending Index, for example, rose for the second consecutive month in April and remains at its highest level in six years. (The index is a measure that attempts to track consumer cash flow as an indicator of future consumer spending.)
Still, the New York-based accounting firm isn't predicting a cakewalk for stores. "While consumers appear to be re-energized, retailers are likely to find that shoppers are navigating the physical and virtual retail space much differently than they did prior to the recession," it says in its report. "Retailers should consider shifts in their marketing and advertising spend," the report says, adding that mobile and social media marketing should target customers both in-store and online.