Macys 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

4% comp

“The key metrics for the second quarter performance include a 4% comp sales increase on an owned-plus-licensed basis, a 30 basis point increase in EBIT as a percent of sales, and an 11% increase in earnings per share on a diluted basis. Those together make for a good quarter and we’re in line with what we expected.”

Customers shop more once buy-online pick up in store

” Internet-generated demand continues to grow rapidly. And we believe that will continue, particularly now that we have rolled out Buy Online Pickup in Store or what some people refer to as click and collect to all the Macy’s and Bloomingdale’s stores.

We haven’t even marketed this capability yet, and we are already finding that many customers like this option. And once in the store, these customers are often buying other items as well.”

environment improving very gradually

“As Terry said in today’s news release, our outlook for the fall season reflects our confident optimism tempered with the reality that many customers still are feeling the impact of an economic environment that at best is improving very gradually.”

Back to school off to a strong start

” the end of the second quarter back-to-school was extremely strong at the start. We’ll see as it goes through the season, but we feel very good about it.”

Retail is always promotional

“I can’t remember a time when it wasn’t promotional. So, I don’t see anything different in the second quarter or the fall season. This is a very promotional business. Our customer very much wants value and very much responds to promotions. So, I don’t see a change happening there….But it’s very promotional.”

Spring was what we expected, it just got shifted

“the spring season was consistent with what we had expected. The timing just changed a little bit.”

Omni channel can improve the performance of the business in a lot of dimensions

“That’s a lot of questions there. I think the omni opportunity is first and foremost sales growth. But what we’re also finding is that there’s gross margin opportunity as well as turnover opportunity from again better coordinating across the company and looking at inventory across channels as well as marketing across channels. So, I actually see it as a huge opportunity across the whole P&L and balance sheet and very exciting.”

Big ticket sales improved. I don’t think it was weather, but they improved

“And in terms of the businesses that improved, I don’t think it’s weather-related. I just think that – and again, I can’t tell you what happened to big ticket in the first quarter. But, it certainly rebounded in the second and we feel better about that going forward.”