Macy’s Inc. reports second-quarter results on Wednesday, but given the delay in the posting of the report, what CEO Jeff Gennette has to say about current consumer shopping trends could be of particular interest.
Back in July when the company posted a staggering $3.58 billion first-quarter loss and a 45.2 percent drop in sales due to temporary store closures, Gennette said initial sales trends for the second quarter were stronger than originally projected. Since Macy’s operates stores in states that saw a rise in coronavirus infections, it could be interesting to see how the retailer managed to work through another Covid-19 spike based on lessons learned in March.
Gennette addressed the safety aspects of the trend toward curbside pickup and said he would provide more details about that in Wednesday’s call. That could provide some insight on holiday sales, what the department store chain might expect from online sales and what Macy’s is doing to keep the nameplate top of mind in competitive market.
The CEO said the digital business has been strong and there’s been an increase in new customers who are both younger and more diverse from what has been its core customer. Has that trend continued? And what is Macy’s doing to keep and convert them to become loyal customers who shop omnichannel?
Retailers such as Target and Kohl’s that have reported earnings thus far point to an earlier start to the holiday selling season, not to mention the expectation of higher shipping costs. What does Macy’s have planned, and what can it do to offset a spike in shipping costs? And Kohl’s warned of a possible slowdown ahead. Will Macy’s do the same?
With over 750 doors, the retailer’s urban stores in the past have provided a sizable sales contribution to its brick-and-mortar component given the denseness of the communities. While international travel has remained down, will a reopening of in-classroom study for the school season bring back those who vacated the cities back in March? The company has said that with cities emptying out at the outbreak, urban flagships have been slower to come back online.
And what about merchandising? Apparel sales have been slow. Much has been said about the move to casual and active now that more people are staying at home. Gennette has said suiting, dresses and social “have taken a hit.” But if ready-to-wear is no longer in vogue, then how is Macy’s adjusting its mix so that even footwear and accessories also reflect the new casual focus?
And with so many stores across the U.S., it will be interesting to hear what other insights and trends Gennette will disclose during the conference call to Wall Street. That might be a good indication of what else could be brewing in the retail landscape that would likely keep fashion executives up at night.