Macy’s targets Millennials, Saks blames Sandy in Q4 earnings
Brick-and-mortar is not enough for Macy’s Inc. and Saks Inc.
It’s all about the so-called omni-channel shopping experience for both the department store chain and the luxury retailer. The tactic tries to lure consumers by offering buying opportunities through an inter-connected network of physical locations, online websites, mobile devices, televisions and more.
Macy’s, which also owns the high-end Bloomingdale’s brand, saw online sales soar 47.7% during the fourth quarter, which ended Feb. 2 for both businesses. Saks added iPads to stores, tested “buy online, ship from store” deals and added “store only” inventory to saks.com displays.
Such efforts helped both companies score positive sales this holiday season at stores open for more than a year, according to their earnings announcements Tuesday.
During the quarter, Macy’s enjoyed a 3.9% same-store sales boost from the same period a year earlier. Overall revenue boomed 7.2% to $9.4 billion.
Macy’s net income sank 2% to $730 million from $745 million, but earnings per share rose to $1.83 from $1.74 during the fourth quarter last year, when there were more shares outstanding.
The retailer is currently in court over J.C. Penney’s product deal with Martha Stewart, arguing that the agreement violates Macy’s exclusive contract with the domestic diva.
Saks had a more muted quarter, with a 0.7% same-store bump following a 7.7% surge the year before.
Profit tanked 45% to $20.4 million, or 13 cents a share, even as revenue swelled 5.6% to $976.6 million.
The results were “negatively impacted by Hurricane Sandy, which caused significant disruption to our very important Northeastern markets and to saks.com,” said Saks Chief Executive Stephen I. Sadove in a statement. The retailer was also bedeviled during a “challenging year” by “continued macroeconomic concerns, election and fiscal cliff distractions,” he said.
Going forward, Sadove said omni-channel investments will pressure profitability. The company, however, still expects same-store sales to grow 3% to 5% over the next fiscal year.
Macy’s said it expects the gauge to increase 3.5% over the same period.
The chain is adapting its strategy of offering exclusive products, locally tailored merchandise and increased digital integration as it woos Millennials, the young shoppers that Chief Executive Terry J. Lundgren calls “America’s largest generation.”
Home Depot Inc. also reported earnings. Sales bumped up 13.9% to $18.2 billion. Net income soared 31.9% to $1 billion, or 68 cents a share.
The company’s stock was up more than 5% to $67.50 a share in late morning trading in New York. Macy’s was riding a 2.5% boost to $39.50 a share. Saks was down less than a percent to $11.01.
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