Macy’s lowers expectations after tough Q2
Cincinnati — Macy’s scaled back its earnings guidance for the remainder of the year in the wake of lower-than-expected net income for the second quarter of fiscal 2013. The retailer reported net income of $281 million, up from $279 million in the year ago period, but short of the roughly $304 million analysts had expected.
In addition, net sales fell .08% to about $6.07 billion instead of climbing 3% to $6.2.6 billion as analysts had expected. Same-store sales also declined .08%. As a result, Macy’s now predicts earnings for fiscal 2013 in the range of $3.80 to $3.90 per diluted share. Terry J. Lundgren, chairman, president and CEO of Macy’s, said consumer concerns about the economy impacted their spending during the quarter.
“We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event,” said Lundgren. “Even so, second quarter sales performance was softer than anticipated, and we are disappointed with the results. Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment. After a cool spring, we have taken appropriate markdowns and customers are responding favorably. Also on the positive side, we have seen a strengthening of the sales trend in key elements of women’s ready-to-wear, a category which has lagged over the past couple of years. Bloomingdale’s sales rebounded in the second quarter, and we are encouraged by our recent momentum,
Looking ahead, Lundgren said incremental sales opportunities in childrenswear, activewear and Impulse apparel, as well as intensified marketing support, omni-channel and online initiatives, localization and customer engagement strategies should all help boost sales later this year.
“Going into the third quarter, we also are encouraged by our early read on the back-to-school season,” he said. “We accelerated receipts of fresh inventory at Macy’s so we could be fully prepared for an early start to the academic year in certain regions of the country.”
Brand Networks prepares for growth with additions to leadership team
BOSTON, Mass. — Brand Networks, a leading integrated social software solutions and digital marketing services provider, has made additions to its executive team as part of the company’s strategy to accelerate expansion.
Anthony Green joins Brand Networks as SVP, new business. Green was formerly at Optimal Inc., a Facebook preferred marketing developer. Jeff Madison joins from Sparkart Group, Inc., an Oakland, Calif.-based digital agency where he served as chief operating officer. Madison will serve as Brand Networks’ first VP of client services.
"Brand Networks recently announced a partnership with AEA Investors which is opening up new opportunities for us across the board," said Paul Falzone, chief growth officer, Brand Networks. "This relationship will allow us to invest aggressively in growth initiatives to bring on outstanding talent like Anthony and Jeff who will be instrumental in helping scale our business to new heights."
At Optimal, Green led business development on the East Coast, Europe and Australia. In his new role, Green will be charged with developing and leading a team dedicated to opening new markets and verticals for Brand Networks. Prior to Optimal, he co-founded Concep, a global B2B marketing technology provider that delivers next generation email marketing solutions to more than 250 firms globally.
At Sparkart Group, Madison was responsible for day-to-day business operations, product and business development, working with Bon Jovi, The Killers, America’s Cup and the UFC. Before entering the digital field, Madison earned his J.D. from Suffolk University Law School where his emphasis was on intellectual property and entertainment law.
"It’s an exhilarating time for digital marketers, as social platforms like Facebook, Twitter and LinkedIn blaze new advertising trails with continued innovation and steady growth," said Jamie Tedford, founder and CEO of Brand Networks. "With our Social Marketing Stack, we help the largest brands in the world centralize and simplify their social efforts, empowering responsive social marketing at scale. We are cultivating a team primed to be a driving force as the social marketing space continues to expand and we are excited for the next phase with leaders like Anthony and Jeff."
Brand Networks recently announced that it raised $68 million in growth financing from AEA Investors, a leading global private equity firm with more than $6 billion of assets under management. In addition to growth in sales and global reach, the funds will be used to accelerate product development, including expansion to social platforms like LinkedIn where Brand Networks has recently been selected to join an elite group of just seven Certified Development Partners.
Brand Networks delivers enterprise-ready social applications with its Social Marketing Stack, which according to the company, harnesses the integrated power of social networks to generate stories at scale, builds brand loyalty and fosters more profitable customer relationships. It is a Facebook Strategic Preferred Marketing Developer. Brand Networks is also a LinkedIn Certified Developer Partner, selected for delivering engaging experiences on the LinkedIn platform. Brand Networks is headquartered in Boston, MA, with offices in Los Angeles, New York City, Rochester, and Toronto.
Macy’s cuts full year sales, profit forecast
Disappointing second quarter sales at Macy’s prompted the nation’s leading department store operator to temper its outlook for the remainder of the year, heightening concerns about the health of the consumer just as other major retailers are due to report financial results in the weeks ahead.
Sales declined 0.8% to slightly more than $6 billion and same store sales fell by a similar amount during the second quarter period ended August 3. Profits increased 7.5% to 72 cents from 67 cents, but that figure was six cents less that analysts forecast.
"We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event,” said Macy’s chairman, president and CEO Terry Lundgren. “Even so, second quarter sales performance was softer than anticipated, and we are disappointed with the results. Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment. After a cool spring, we have taken appropriate markdowns and customers are responding favorably.”
He added the company was encouraged by a strengthening of the sales trend in key elements of women’s ready-to-wear, a category which has lagged over the past couple of years. Also, sales at the Bloomingdales banner rebounded in the second quarter and back-to-school seasonal sales are encouraging, according to Lundgren.
Even so, the positive signs were not enough for Macy’s to maintain the company’s full year sales and profit forecast. Same store sales in the back half of the year are forecast to range from 2.5% to 4% which equates to a full year increase in the range of 2% to 2.9%, well below an earlier forecast that called for an increase of 3.5%.
Reduced expectations for sales resulted in a downward profit forecast. The company now expects full year earnings in the range of $3.80 to $3.90, compared to an earlier forecast of $3.90 to $3.95.
According to Lundgren, Macy’s has intensified marketing support throughout the second half of the year to emphasize the fashion and value it delivers.
"We believe we have the right strategies in place at Macy’s and Bloomingdale’s, particularly in the omnichannel and online initiatives that are driving our business to a new level of shopping accessibility for our customer,” Lundgren said. “Our My Macy’s localization and Magic Selling customer engagement strategies continue to differentiate the Macy’s shopping experience.”