MACY’S REPORTS 3.7% SALES DECLINE FOR FISCAL 2015, REMAINS CAUTIOUS FOR 2016
For the 52 weeks of fiscal 2015, Macy’s, Inc. sales totaled $27.079 billion, down 3.7 percent from total sales of $28.105 billion in fiscal 2014. Comparable sales on an owned plus licensed basis for the full-year 2015 declined by 2.5 percent. On an owned basis, full-year 2015 comparable sales were down 3.0 percent.
Sales in the 13-week fourth quarter of 2015 totaled $8.869 billion, down 5.3 percent from total sales of $9.364 billion in the fourth quarter of 2014. Comparable sales on an owned plus licensed basis for the fourth quarter were down 4.3 percent. On an owned basis, fourth quarter comparable sales declined by 4.8 percent.
“While 2015 was challenging, our sales trend improved in January as the weather turned colder in northern climate zones and Macy’s and Bloomingdale’s were well-stocked in coats, boots, sweaters, gloves, hats and other seasonal goods. As the year ended, our inventories were in good shape (up by 0.7 percent on a comp basis),” said Terry J. Lundgren, chairman and chief executive officer of Macy’s, Inc. “We are encouraged by the way the business responded going into 2016, and we believe we are well positioned to stabilize sales levels this year as we lay the foundation for enhanced shareholder value and sustained, long-term profitable growth. Given our determination to rise above our disappointing 2015 performance, I have reminded my team that our setback last year is a setup for our comeback.”
In fiscal 2015, the company opened a total of 26 stores and closed 40 stores, all as previously announced. New stores included Macy’s in Ponce, PR, Bloomingdale’s in Honolulu, HI, 15 Bluemercury self-standing stores, six Macy’s Backstage self-standing stores and three Bloomingdale’s Outlets.
“Moving ahead, Macy’s remains rooted in the M.O.M. strategies that have resonated with customers seeking fashion, value, quality and convenience as customers shop us in stores and digitally,” continues Lundgren. “After the previous six consecutive years of cumulative success, 2015 reminded us that retailing is a dynamic business that requires continuous reinvention as the customer evolves. Today, we are examining every aspect of our business so we can grow profitable sales and re-attain our goal over time of an EBITDA rate as a percent of sales of 14 percent.”
Macy’s, Inc. has reported fiscal 2015 earnings per diluted share of $3.22, or $3.77 per diluted share excluding asset impairments, store closing and other costs. The company’s fourth quarter and full-year sales and earnings exceed the company’s most recent guidance.
Added Lundgren: “We should not lose sight of the investments we made in 2015 that will help us down the road. We registered yet another year of double-digit growth in our online business, fueled by exceptional increases in mobile traffic and increased conversions, with exciting new offerings from macys.com and bloomingdales.com.”
The company expects comparable sales on an owned plus licensed basis to decline by approximately 1 percent in fiscal 2016, with comparable sales on an owned basis to be approximately 50 basis points lower. Total sales are expected to be down by approximately 2 percent in fiscal 2016, reflecting the 40 stores closed in 2015. Earnings of $3.80 to $3.90 per diluted share are expected in 2016. Capital expenditures for 2016 are expected to be approximately $900 million, compared with the capital expenditures of approximately $1.1 billion in fiscal 2015.
In fiscal 2016, the company expects to open a new Macy’s store in Kapolei, HI, as well as approximately 42 additional Bluemercury locations (24 freestanding and 18 inside Macy’s) and 16 Macy’s Backstage locations (one freestanding and 15 inside Macy’s). Announced new stores in future years include Macy’s in Murray, UT (2017), a Macy’s replacement store in Los Angeles, CA (2017), and Bloomingdale’s in San Jose, CA (2017) and Norwalk, CT (2018). In addition, a new Bloomingdale’s store is expected to open in 2017 in Kuwait, and new Macy’s and Bloomingdale’s stores are planned to open in Abu Dhabi, United Arab Emirates, in 2018 under license agreements with Al Tayer Group.
