As Macy’s heads into holiday selling, improved results in several categories has upped expectations.
Business is still tough with comp-store sales down 2.7 percent in the third quarter ended Oct. 29, though Macy’s had “a very strong quarter in apparel, men’s, women’s and kids’,” said Karen Hoguet, chief financial officer, during the Morgan Stanley Global Consumer and Retail Conference on Wednesday.
Hoguet also cited shoes, booties and over-the-knee boots, and denim, particularly a wider leg profile that fuels a desire to buy shoes, jewelry and shirts. Ath-leisure and home performed well too, and Macy’s has had “a fabulous run with fragrances,” which tends to be a big fourth-quarter business.
However, “the treatment and color businesses have been a little bit tougher and we’re working on that,” Hoguet said. “Part of that has been discounting by others…. We’re continuing to look for new brands, new ways of selling, new ways of marketing… We’re learning from Bluemercury and putting it into the core fabric of Macy’s.”
Cold-weather apparel didn’t do well, but Hoguet said those results were offset by more robust categories. “Obviously, we would love to see some more cold weather.”
Macy’s now expects full-year 2016 comparable sales to decrease 2.5 percent to 3 percent, compared with previous guidance of a 3 to 4 percent decrease.
For holiday, Hoguet said Macy’s has focused on “lots of wonderful new gift items” including tech watches from Apple and Michael Kors. She’s encouraged by the demand for tech watches. “What we’re seeing in watches, with tech watches, I hope happens in handbags, which is newness and something really different.”
In some key categories, shoes among them, “We’ve narrowed the breadth of the assortment in many stores and therefore increased the depth, still with less inventory…today, we’re more likely to have what you want in stock. It’s always been a big friction point for us — having what the customer wants in the color and the size. Herald Square is an exception where the breadth of shoes was increased.
Fourth-quarter inventories are in the “appropriate shape both in terms of quantity and quality, and that gives us the flexibility to react to trends and also frankly, the ability to transition inventories as we get through December,” Hoguet said.