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Macy’s CEO Jeff Gennette has been saying that the department store company he leads is a different and better retailer than it has been in the past. The chain’s most recent quarterly results don’t appear to do anything to disprove that assertion.

The company reported a 12.8 percent increase in first-quarter same-store sales as its namesake chain posted a 10.7 percent gain and Bloomingdale’s sales jumped 28.1 percent. The two chains saw significant gains in active shoppers — 44.4 million shopped at Macy’s, a 14 percent gain, and four million at Bloomie’s, a 21 percent improvement.

Mr. Gennette, speaking yesterday on the company’s earnings call , said that Macy’s benefited from gains in “ occasion-based apparel” as its customers attend more social events and return to offices to work. This development, similarly to what Nordstrom reported earlier in the week, led to increased foot traffic in Macy’s stores.

Macy’s continues to double down on its omnichannel strategy with a focus on personalization.

“We’re starting to see the results of this personalization work, with revenue driven by personalized product recommendations up 13 percent during the quarter,” said Mr. Gennette. “While we’re still in the early innings of these initiatives, we’re pleased with these results. And we continue to test and iterate to find the best communication channels, frequency, messages and offers.”

Macy’s CEO said the chain saw an increase in the number of customers actively using its mobile app of 14 percent, rising to 7.4 million in the last quarter.

He also said that progress was being made on the launch of Macy’s online marketplace, which is scheduled to go live in the third quarter.

The chain’s offprice Backstage store-within-a-store concept is a growing contributor to Macy’s results. The concept posted high single-digit comp gains compared to 2021. Macy’s is in the process of opening 37 new Backstage shops, including one in its Herald Square flagship. The retailer now operates more than 300 of the shops.

Mr. Gennette said that the retailer was also enhancing its merchandise.

“We’re putting a lot of focus here as we look to engage more customers and grow our market share.” he said. “We are in the early stages of reimagining our private brand portfolio and realigning our private brand team under new leadership in partnership with our broader merchandising and sourcing teams. Our goal is to have a private brand portfolio that is differentiated, defendable and durable.”

DISCUSSION QUESTIONS: Are you becoming a Macy’s believer? Where do you see the biggest needs and opportunities facing the company at this time?

22 Comments on "Is Macy’s for real?"

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Macy’s is benefiting from some of the same trends that are driving Nordstrom’s results right now. The return to the office, coupled with “occasion” dressing (dining out, travel, etc.) is moving customers to the kinds of merchandise that traditional department stores carry. This is especially true at the moderate-to-better end, while midtier retailers like Kohl’s have doubled down on activewear and may be missing this change in consumer behavior.

Are the results at Macy’s sustainable? The company has a lot of initiatives happening, but I’m skeptical based on erratic results in the past.

I am a Macy’s believer. I have always been in Macy’s corner but it’s a tough spot to be in these days when there is such a discrepancy between what’s said in the press and what’s happening on the sales floor.

Mr. Gennette, some of your stores are a MESS. It’s hard for consumers to love Macy’s when they have to dig through piles of product to find what they are looking for. (If you need evidence check out the photos on @neilretail’s Twitter.) The wonderful Thanksgiving Day Parade, new stores and departments aside, to do well people need to be able to love their local Macy’s. For that to happen Macy’s must recreate and refine the in-store experience in every one of its locations.

That’s my experience, too. The stores are a mess, but there are outstanding deals to be had online. The stores team has to come up with a plan.

Destroyed sales floors seem to be a trend right now, but it’s disheartening for shoppers when they find it happening in their favorite stores.

Agreed. It always seems that the music is too loud and there’s clothing on the floor. That said, I spent a ton at Macy’s last Christmas, online.

Me too, but on the sales floor.

We still need our joint store visits tour! We’ll neaten up those stores in no time! Haha.

The department store business model is still the department store business model and nothing Macy’s has done lately has changed that. It’s great to beat crappy numbers, makes you feel like you’re headed in the right direction, but in reality getting the pump working on a sinking ship only lasts so long. I don’t know of ONE person under 25 that shops Macy’s, not one. Or would think of it. The new department store is where all of us shop just about three times a week, and it’s got a big smiley face on its boxes because of it.

He obviously hasn’t walked around his appalling stores. And sales are down on 2019 even though overall consumer spending has skyrocketed. That tells you all you need to know.

Macy’s has made significant strides in getting its foundational customer-first elements in place. As customers return to the office, and there are special occasions to plan for, Macy’s assortments, pricing, and value proposition are well-positioned to meet the changing consumer needs. A robust store within a store concept, as well as a comprehensive private label offering, will be key differentiators in a disrupted department store sector.

Macy’s has momentum and it’s imperative that the company focus on execution on the sales floor, with proper merchandising, outstanding customer experiences, empowered sales associates, and a fully connected digital and physical commerce experience. While the first-quarter numbers are encouraging, execution and delivering on the brand promise are key to long-term success.

The fact that Macy’s bucked the trend of negative comps is pretty amazing. It was interesting to see that personalization was called out — our data shows that personalization is used primarily at the front end (e.g. commerce phase) of the shopper journey and far less in the retention phase. If Macy’s can mature their personalization strategy, I believe they can achieve even better results. It’s a good counter punch to the department store’s weakness – too much choice. The off-brand growth is also a good strategy considering our current inflationary environment.

I have always been a believer in Macy’s, and these performance numbers only cement that belief. They have made big investments in technology that are now bearing fruit. They are a leader in RFID, allowing them to reduce and in some cases eliminate safety stock — which in turn enables them to sell to the last item. They are also leveraging the technology to lower shrink and improve inventory control, increasing visibility into product location throughout the supply chain. They’re even using RFID for managing returns more cost effectively. Full disclosure: we talk about the Macy’s RFID story in our recent white paper that gives an overview of RFID tech implementation and best practices in retail.

I would put more weight on shopper trends as we have opened up, than on any particular executed personalization program. Macy’s requires a more structural/transformational change.

While I was encouraged by Gennette’s discussion of customer segment performance, his comments about the short-term future were classic garmento blah-blah-blah. And I find the bobbing and weaving between corporate and store Macy’s numbers annoying.

Bloomies and Nordys performance suggests the high end is covered. And below $75,000 will remain covered by dollar stores and discounters. The middle needs a shopping experience that is relevant to the customer. Respecting her matters, as is pointed out by the unforgivable unkempt selling floors. Macy’s fails here. KSS doesn’t seem much better. And JCP is what again?

Returning to work will be a short-term lift. The COVID-19 delayed baby boom suggests life stage activation and a promise for greater spend. Dillard’s disproves the “department store demise” — it benefits from a tight geography? I’m still not convinced that Macy’s has its finger on the nationwide shopper’s pulse.

I certainly want to believe that Macy’s is turning around, but unfortunately I think it’s just a change in consumer behavior. Due to labor shortages and supply chain issues, the stores look sub-standard. The Backstage category has been a win, but I’m unsure if that’s just replacing sales from the regular priced clothing or adding new business. Time will tell if it’s sustainable.

No and honestly, do we really need to ask? Every time Macy’s is mentioned on RW, which is often — many might say too often given the lack of actual “news” — comes forth a flood of similar remarks: messy, poorly merchandised stores, a general lack of staffing and an endless parade of initiatives that for the most part quietly disappear. That comp sales are up from some dismal pandemic figures, in the highest inflation environment in four decades, means little.

I’ve nothing against Macy’s and they’re in a challenging spot, but it’s silly to go along with what amounts to self-congratulation.

Not real as we are talking results against lousy comps. Macy’s cannot be successful if the same brands are available in discount stores even if it is different merchandise. Home Depot, Costco , TJX, target have figured it out, why can’t Macys? They need the same dynamic merchandising initiatives that they have for events, parades, fireworks, flower shows and the same dynamic efforts as they have for real estate decisions — customers have voted for more than 20 years for value just give it to them. A merchants job has always been defined as figuring out and giving the customer what they want, not what you think they need.

Count me in the skeptic camp, again. Looking at the increase in loyalty members versus the comps, there is a negative spread. Digital comps barely positive. Macy’s brand remains irrelevant for younger consumers and it’s hard to see Macy’s doing much to change that, in spite of Polaris and other initiatives. Good thing for inflation and its impact on the comps though, and share buybacks on EPS.

How confident are you that Macy’s has the right strategy in place to grow its business?