Macy’s Q2 sales down 3.9 percent, plans to shut another 100 stores

Macy's sales in the second quarter of 2016 totaled 5.866 billion dollars, a decrease of 3.9 percent, compared with sales of 6.104 billion dollars in the same period last year. Comparable sales on an owned plus licensed basis were down by 2 percent. On an owned basis, comparable sales declined by 2.6 percent. The company said that difference between the year-over-year change in total and comparable sales largely resulted from the closing of 41 underperforming Macy's stores in fiscal 2015. The company also plans to close around 100 full-line Macy's locations in early 2017.

"We are encouraged by the distinct improvement in our sales and earnings trend in the second quarter. This trend improvement gives us confidence in our plans for the back half of the year, and in our strategic planning for improvements to our business model going forward," said Terry J. Lundgren, Macy's Chairman and CEO.

Q2 diluted earnings down to 3 cents

The company reported diluted earnings per share of 3 cents. Excluding asset impairment and other charges primarily related to upcoming store closings and non-cash retirement plan settlement charges of 255 million dollars or 51 cents per share, earnings per share were 54 cents per share. The company's earnings for the second quarter of 2016 compare with 64 cents per diluted share in the second quarter of 2015.

Earnings per share in the first half were 41 cents (94 cents per share excluding asset impairment and other charges primarily related to upcoming store closings and non-cash settlement charges related to the company's retirement plans, compared with earnings per diluted share of 1.19 dollars in the same period last year.

For the year to date, Macy's sales totaled 11.637 billion dollars, down 5.7 percent. Comparable sales on an owned plus licensed basis were down by 3.8 percent year-to-date in 2016. On an owned basis, year-to-date comparable sales declined by 4.4 percent.

In the second quarter, the company opened seven Bluemercury freestanding specialty stores. In the fall season, scheduled store openings include a Macy's in Kapolei, HI, one Macy's Backstage freestanding store in San Antonio, one Bloomingdale's Outlet in Orange, CA, and 10 additional Bluemercury freestanding specialty stores. In the second quarter, eight Macy's Backstage and seven Bluemercury shops opened inside Macy's stores, with another five in-store Macy's Backstage and seven in-store Bluemercury shops planned for the fall season. In the third quarter, Macy's is closing stores in North Hollywood, CA, and West Valley City, UT.

Macy's expects full-year comparable sales on an owned plus licensed basis sales to decrease in the range of 3 percent to 4 percent, with comparable sales on an owned basis to be approximately 50 basis points lower. The company expects earnings per diluted share (excluding asset impairment charges and retirement settlement charges) to be in a range of 3.15 dollars to 3.40 dollars.

Picture:Facebook/Macy's