Thanks to relatively tight inventory control, Macy’s fared better than feared in the second quarter. Inventory was up 7% year over year and down 8% versus 2019. Net sales were essentially flat, down 0.8%, with store comps (including licensed spaces) down 1.6% year over year and up 4.4% compared to 2019, per a company press release.
Gross margin contracted to 38.9%, from 40.6% a year ago, with merchandise margin degradation driven by permanent markdowns at Macy’s, largely on pandemic-related goods, seasonal goods and private brands. Net income fell 20.3% to $275 million.
Noting that results have deteriorated since Father’s Day as consumers grow more financially stressed, the company lowered its outlook for the year. Macy’s now expects net sales to reach $24.3 billion to $24.6 billion, down from previous guidance for $24.5 billion to $24.7 billion.Retail Dive