Macys 3Q14 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

We were disappointed with our sales

“we were disappointed with our sales. We assume that we were not immune to the weaker than anticipated consumer spending which has been acknowledged or reported by other retailers.’

Comps were negative because strong comp last year

“Sales in the quarter were $6,195 million down 1.3% versus last year. And on a comparable basis including license businesses sales were down 0.7% excluding the license businesses comp sales were down 1.4%. Remember that last year our comp sales including the license businesses were up 4.6% so on a two year basis we were up 1.9% per year. And this is about the same as the spring season trend.'”

We did not maintain a strong start to back to school

“We were disappointed however that we did not sustain the momentum of the strong start to our back to school business in Kids.”

Bloomingdales also fell short of expectations

“Bloomingdales also fell below expectations to top line sales in the third quarter.’

Bad top line, but better bottom line

“So overall, I would say that this third quarter was disappointed on the top line but strong in terms of the bottom line.”

There are positives in the economy but consumers are spending on other categories

“As I said earlier we have optimism surrounding our strategies and the strength in our execution capabilities we also see positive factors in the economy, lower gas prices, lower unemployment and healthy financial markets. We are however balancing these factors with the reality of the recent trend caused in part by customer spending more their disposable dollars on categories we don’t sell like cars, healthcare, electronics and home improvement.”

Not further pickup in promotional activity

“In terms of promotion, this business has been very promotional for a while and you are not going to see big increases in promotions quarter to and then in any given time period. So I would say your statement on the third quarter it’s essentially true which there is not lot more promotional activity.”

September and October were not as good as August

“as we look at the quarter August was great, September and October were less so. So that’s really the trend there. We started November on a great path but again the fourth quarter is made up from the week in November. So I want to be careful there.”

Consumers are spending their dollars in different ways

“I believe we have seen some relationship in terms of discretionary spending gas prices. But I think customers are choosing to spend their disposable dollars in different ways that’s part of the reason why we are not more optimistic about the lower gas prices.”