Macy’s Q4 profit up 11% but sales miss; opening four new stores
New York – Macy’s Inc.’s fourth-quarter profit increased 11%, but the chain’s sales missed forecasts as ongoing winter storms caused a sales slump in January. The company also announced plans for new Macy’s stores in Sarasota, Fla.; Las Vegas; and The Bronx, N.Y., in fiscal 2014. A new Bloomingdale’s will open in Palo Alto, Calif., to replace an older store in the same shopping center.
Macy’s reported net income of $811 million during the fourth quarter, up 5% from $730 million in the same period a year earlier. Sales dropped 1.6% to $9.2 billion from $9.35 billion. Analysts had expected a more modest decline to about $9.28 billion. Same-store sales grew 1.4% for the quarter, less than the 2.5% projected by Wall Street.
During the full fiscal year, net income rose 19% to about $1.45 billion. Net sales totaled $27.93 million, up 0.9% from $27.69 million. Same-store sales increased 1.9%.
Although same-store sales in November and December 2013 rose 3.6% due to strong holiday performance, a worse-than-expected post-holiday slump in January 2014 led to Macy’s net sales loss for the quarter. Macy’s said severe weather resulted in 244 Macy’s and Bloomingdale’s stores across the country being shut at some point during the month.
Macy’s credited part of its net income growth to its ability to place more of the 2,500 employees who were laid off in January 2014 into new jobs than it had expected. In addition, Macy’s said its core business strategies, My Macy’s localization, Omni-channel integration and Magic Selling, which are known by the acronym of M.O.M, helped drive profitability and will continue to do so in the future.
“As has been the case since we began implementing these strategies in the 2008/2009 period, our competitive advantage is in the unique combination of localization, omni-channel and enhanced customer engagement,” said Terry J. Lundrgen, president, chairman and CEO of Macy’s. “Customers are able to shop for and buy the products that they want and prefer in our stores, via mobile devices and on computers in a shopping environment that delivers outstanding value and is supported with great service. “
The company is reiterating its annual sales and earning guidance, initially provided on January 8, 2014. Same-store sales growth in fiscal 2014 is expected in the range of 2.5-3%. Earnings of $4.40 to $4.50 per share are expected in 2014.
Calendar shift affects the Home Depot’s fourth quarter
Although the Home Depot’s overall sales missed analysts’ expectations, the retailer said the calendar shift, which resulted in one fewer week in the fourth quarter compared to the prior-year quarter, affected its results.
The world’s largest home improvement retailer reported fourth-quarter total sales of $17.7 billion, down 3% from the same quarter last year, which benefited from an extra week in the calendar. On a 13-week basis, the company’s sales actually increased 3.9%.
Comp-store sales in the quarter increased 4.4% company-wide and 4.9% in the United States. Net earnings were $1.01 billion, down slightly from $1.02 billion a year ago.
For the full year, the company pointed to strong performances across the board. Net sales increased 5.4% to $78.8 billion — excluding the 53rd week from the prior year, the increase was 7.2%. Comp-store sales increased 6.8% for the company, and increased 7.5% for the U.S.
"In 2013, we posted our strongest comp sales growth in 14 years as solid execution and the recovering housing market aided our performance," said Frank Blake, CEO and chairman.
Looking ahead, the company expects sales growth of about 4.8% in 2014, with comp-store sales growth of about 4.6%. The company’s guidance also called for seven new stores.
True Value enhances mobile ordering app
True Value’s Mobile Order App for smartphones is putting more power into the hands of retailers, according to the co-op.
The True Value mobile ordering app, which began as a concept about 18 months ago, is now in its sixth month of operation. It’s in use at about 1,800 retailers making thousands of orders, said Rosalee Hermans, head of information technology for True Value.
One of the valuable functions of the app is its ability to show pricing and margin information on any product in the store or warehouse, making comparison shopping and product look up fast and easy, she said.
New functions unveiled here at the True Value Reunion in Atlanta include the ability for a retailer to view order history, to receive order status updates and to hide the warehouse price. The last function can be helpful if the retailer is using the app in a customer-facing situation.
According to Hermans, True Value’s IT strategy is basically to boost the competitiveness of True Value now and in the future. That includes inward-looking products at the warehouse or corporate level, and also outward-looking tools connecting retailers and customers.
For retailers, downloading the app to their smartphone will only help both areas. She stressed that the process takes no more than three minutes, probably a lot less, she said.