Macy’s posts strong Q3; profit up 22%
New York — Macy’s reported a profit for the third quarter that easily exceeded Wall Street, helped by stepped up marketing.
For the quarter ended Nov. 2, Macy’s earned $177 million, up from $145 million a year ago.
Revenue rose 3% to $6.28 billion. Same-store sales increased 3.5%, beating the 2.1% rise analysts expected.
Sales trends improved in every region, and both the Macy’s and Bloomingdale’s chains performed well, the retailer said.
Macy’s chairman and CEO Terry Lundgren called the results particularly notable in light of the “tepid economic climate” of the quarter, which included consumer spending that occurred during the government shutdown in October.
“Our improved sales performance resulted from continued success in the execution of our key strategies – My Macy’s localization, omnichannel integration and Magic Selling customer engagement. In addition, business in the third quarter benefitted from intensified marketing strategies to emphasize the outstanding value in our merchandise deliveries,” said Lundgren.
NRF: More shoppers turning to holiday gift cards
Eight-in-10 (80.6%) shoppers will purchase gift cards this holiday season, according to the National Retail Federation’s Gift Card Spending Survey conducted by Prosper Insights & Analytics.
Holiday shoppers will spend an average of $163.16 on gift cards, up 4.0% over the $156.86 they spent last year and the highest amount in the survey’s 11-year history. Total spending on gift cards will reach $29.8 billion.
Consumers will also spend more on the cards they buy: those planning to buy gift cards will spend an average $45.16 per card, up from $43.75 last year and another survey high.
Shoppers older than 65 years old will spend the most on gift cards at an average of $175.96, followed by 35-44 year olds who will spend $171.15 on average. Additionally, men will spend nearly $20 more than women on gift cards this holiday season ($171.35 versus $155.42 respectively).
Department stores (40.3%) and restaurants (34.2%) will be the top choices for those giving gift cards.
Additionally, 20.1% will purchase gift cards from an electronic store and 12.7% will head to an online merchant. With gas prices hovering around $3.19, some may see relief at the pump this holiday season from their friends or family members.
According to the survey, 12% of shoppers will buy gift cards from gas stations, up from 11% last year and the highest amount seen in five years.
Turnaround expert Roland Smith named CEO of Office Depot
New York — Office Depot Inc. — the new entity created by the merger of Office Depot and OfficeMax — named Roland Smith as CEO, effective immediately. Smith, 59, most recently served as CEO of Delhaize American, a division of Belgian grocery giant Delhaize Group. Prior to that, he was president and CEO of The Wendy’s Co., holding company for the Wendy’s chain.
Smith’s appointment comes a week after Office Depot closed its $1.2 billion merger with OfficeMax. In conjunction with his appointment, the two CEOs of Office Depot and OfficeMax, Neil Austrian and Ravi Saligram respectively, who were serving as co-CEOs of the combined company, both resigned.
Smith comes to Office Depot "with a strong retail track record of increasing operating profit, managing complex integrations, directing corporate turnarounds and transforming companies for future success," the company said in a statement.
Smith has acquired a reputation as a turnaround expert He joined Arby’s in 1994 and was named CEO in 1997. From 1996 to 1998, the chain nearly tripled its operating profit and improved same-store sales.
He then moved on to AMF Bowling Worldwide Inc., where he took the company into and out of Chapter 11 bankruptcy and reduced debt by two-thirds. He next ran American Golf, where he increased revenue. In 2006, he returned to Arby’s, where he helped oversee its merger with Wendy’s.
“I know that numerous cross-company teams have worked diligently over the past eight months to create a clear blueprint for the integration of Office Depot and OfficeMax," Smith said. "Moving forward, my focus will be on fully integrating the two companies, achieving the planned synergies, creating a compelling vision for the future, and leveraging our infrastructure and assets to drive improved profitability and increased revenue. Additionally, I fully understand that we need to make a headquarters decision quickly so that we can drive our integration efforts.”
Smith said the companies’ combined resources have the ability to transform the merged company to "provide new opportunities for our global associates, become a more appealing partner to our vendors and increase value for our shareholders."
Nigel Travis, Office Depot’s lead director, co-chair of the CEO selection committee and chairman and CEO of Dunkin’ Brands, said he Selection Committee spent several months evaluating more than 100 candidates.
“Roland is uniquely qualified for the newly combined Office Depot and OfficeMax,” Travis said. “He has decades of experience integrating companies and cultures and an impressive track record in turning around businesses. Additionally, he brings outstanding leadership that will be invaluable as we seek to transform and grow our new company.”