Profits Plunge, Sales Drop at Macy’s. Slashes Jobs, Closes Stores. Stock Jumps 18%

Jon Blogosphere, Economy, Market Commentary

Brick-and-mortar retail sinks artfully into coma.
It’s been a tough quarter for Macy’s. Again. Sales dropped 4% to $5.87 billion in the second quarter, it reported today. It had already closed 41 ‘underperforming Macy’s stores’ in its fiscal year 2015. So among the remaining company-owned stores, comparable sales fell 2.6%. Operating income plunged 73% to $117 million. Net income plummeted 95% to a nearly invisible $11 million, or 3 cents a share.
The first quarter, on a year-over-year basis, was even worse. So for the first half, sales dropped 5.7%, operating income 53%, and net income 82%.
‘We are encouraged by the distinct improvement in our sales and earnings trend in the second quarter,’ is how CEO Terry Lundgren explained the red-ink phenomenon. He even gave credit to ‘a normalized weather pattern’ – rather than blaming the weather, as is normally the case. And tourist spending dropped again, but less than before.
Then came the music to Wall Street’s ears.

This post was published at Wolf Street by Wolf Richter ‘ August 11, 2016.