Macy’s swung to a loss and sales tumbled 22% as the department store chain struggled to bring shoppers back to stores during a pandemic.
Online sales for New York company rose 27% in third quarter
NEW YORK—Macy’s swung to a loss and sales tumbled 22 per cent as the department store chain struggled to bring shoppers back to stores during a pandemic.
But the beleaguered retailer did better than most had expected because it was able to get its customers thinking about holiday shopping early for safety reasons, and to avoid the expected shipping crush this year.
Macy’s had a loss of $91 million (U.S.), or 29 cents per share in the quarter ended Oct. 31. That compares with a profit of $2 million, or a penny per share in the year ago period. Sales fell to $3.99 billion in the quarter compared with $5.17 billion in the year ago period. Analysts were expecting a loss of 83 cents on sales of $3.91 billion.
Sales at stores opened at least a year fell 20.1 per cent. That includes businesses at licensed departments like jewelry. Online sales rose 27 per cent.
Like most retail stores, Macy’s was forced to close its stores during the spring to curb the spread of the coronavirus and sales evaporated. The New York company furloughed a majority of its employees. Macy’s began reopening its store in May but the recovery has been slow, and it needs to acclimate to a trying business climate that has tipped other chains into bankruptcy protection this year.
In June, Macy’s laid off 3,900 people corporate staffers, roughly 3 per cent of its overall workforce, as the pandemic takes a financial toll on the iconic department store chain’s sales and profits.
Macy’s has a heavy presence in malls, which had begun to struggle long before COVID-19. Others that have been cornerstones at malls for decades, J.C. Penney and Neiman Marcus, have sought bankruptcy protection, as has Stage Stores. Neiman Marcus emerged from bankruptcy in September.
J.C. Penney is on track to exit bankruptcy protection by Thanksgiving under new owners, its mall landlords.
Macy’s over the next two years plans to open smaller stores, including new locations of its Bloomingdale’s stores, that are not attached to malls.
For the holiday season, Macy’s, like other retailers, is spreading discounts over a longer period to avoid overcrowding at its stores and continue to push shoppers to buy online and pick up at the curb.
The virus is also forcing Macy’s to rethink how it will hold its annual holiday events, like Christmas tree lightings, holiday window decorations and its annual Thanksgiving Day parade.