Macy's, Inc. (NYSE:M) Q1 2017 Earnings Conference Call - Final Transcript

May 11, 2017 • 10:00 am ET


Macy's, Inc. (NYSE:M) Q1 2017 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Macy's Inc. First Quarter 2017 Earnings Conference Call. Today's conference is being recorded. I would now like to turn the call over to your host, Karen Hoguet. Please go ahead, ma'am.

Karen Hoguet

Good morning. Joining me on the call today is Jeff Gennette, our new CEO. Any transcription or other reproduction of the statements made in this call without our consent is prohibited. A replay of the call will be available on our website,, beginning approximately two hours after the call concludes. Please refer to the Investor Relations section of our website for discussion and reconciliations of any non-GAAP financial measures discussed this morning.

(Forward-Looking Cautionary Statements) So on this morning's call, I'm going to first take you through our results for the first quarter, and then I'm going to turn the call over to Jeff to make a few comments. We will then both take your questions. Our sales and earnings in the first quarter were consistent with our expectations and keep us on track to achieve our annual guidance of a comp owned plus licensed sales decline of 2% to 3% and earnings per share of $3.37 to $3.62, excluding retirement plans, settlement charges and premiums on debt repurchases.

This includes the approximately $0.47 per share gain expected on the sale of the Union Square Men's building that will be booked in the fourth quarter. Remember that we sold this building in January and received the cash at that time. Sales in the first quarter were $5.338 billion, down 7.5% from last year. On a comp owned plus licensed basis, sales were down 4.6% and down 5.2% on an owned basis. The back half of the quarter performed better than the first.

Sales in the quarter continued to grow double digits in the digital channel. While the sales performance in our stores were consistent with our expectations, the sales declined versus last year. The Southwest region based out of Los Angeles was strongest, and the Northeast region was weakest. International tourists sales declined at about the same rate as our comp sales, meaning it didn't have an impact. We had hoped, however, that the uptick we saw in the fourth quarter would help us in 2017.

By family of business, our sales were strongest in women's apparel, most notably, active and dresses and fine jewelry, fragrances, women's shoes, furniture and mattresses. Weaker businesses in the quarter included handbags, fashion jewelry and watches, housewares and top of table. Trends at Bloomingdale's were similar to those at Macy's in the quarter. Bluemercury had a strong quarter with continued successful store openings as well as double-digit comp growth.

In the quarter, the number of transactions declined 7.5%, while average unit retail increased 0.7% and units per transaction increased 2.2%. We now have 26 Backstage stores open within our Macy's stores and are adding 19 more this year. We are encouraged by the performance of these combined stores, where the total store sales are being lifted versus control