Macy’s posts $400 million loss as sales drop 36%

NEW YORK (AP) — Macy’s got more people to shop on its website and app, but it wasn’t enough to make up for plummeting sales inside its department stores.

Online sales were up 53%, and the company said it attracted 4 million new online customers. But sales sunk 61% inside its stores, which reopened in June after being temporarily closed due to the pandemic.

Macy’s is the country’s largest department store operator, offering a glimpse into what America’s are buying.

With people spending more time at home, shoppers bought fewer dresses, luggage and men’s suits. But they spent more on comfy athletic wear, as well as decor to spruce up their homes. Macy’s said luxury goods did surprisingly well, too, such as high-priced mattresses, perfumes and diamond jewelry. The New York company also owns Bloomingdale’s and the Bluemercury makeup and cosmetic chain.

Many of its department stores are at malls, which have struggled to attract shoppers even before COVID-19. Some of its mall-based rivals have gone bankrupt, including J.C. Penney, Neiman Marcus and Stage Stores.

Over the next two years, Macy’s said it plans to open smaller Macy’s and Bloomingdale’s stores that are not attached to a mall.

For the holiday season, it will spread out discounts over a longer period to avoid overcrowding at its stores and continue to push shoppers to buy online and pick up at the curb.

The virus is also forcing Macy’s to rethink how it will hold its annual holiday events, like Christmas tree lightings, holiday window decorations and its annual Thanksgiving Day parade. But the company didn’t provide any details on changes it plans to make.

Overall, the company reported a second-quarter loss of $431 million, or $1.39 per share, after posting a profit in the same quarter a year ago.

Adjusted losses came to 81 cents per share, which was better than the loss of $1.78 per share Wall Street analysts expected, according to Zacks Investment Research.

Revenue fell 36% to $3.56 billion in the period, also topping analyst expectations.

Shares of Macy’s Inc., which are down nearly 60% so far this year, rose less than 1.5% to $7.12 in midday trading Wednesday.

Associated Press

Online sales jump on Cyber Monday, eBay shines

SAN FRANCISCO — Online sales jumped on Cyber Monday, sending e-commerce retailers’ shares higher and suggesting strong growth from earlier in the holiday shopping season is continuing for now.

Sales on eBay Inc’s online marketplace were particularly strong and Amazon.com Inc continued its rapid holiday shopping season growth, according to early Cyber Monday data released by e-commerce firm ChannelAdvisor.





EBay’s shares climbed 4.9 percent to close at $51.40. The stock hit an intra-day high of $51.78, the highest level since early 2005. Amazon’s shares gained 1.6 percent to $243.62.

Cyber Monday has been the biggest online shopping day in recent years, as workers return to offices and use computers to make holiday purchases. ComScore expects online sales to hit a record of about $1.5 billion by day’s end.

Online sales were up 25.6 percent as of 3:00 pm EST on Monday, compared with the same period a year ago, according to International Business Machines Corp which tracks transaction data from 500 U.S. retail websites. In 2011, Cyber Monday year-over-year growth was 15 percent by 3:00 pm, IBM said.

Strong online sales growth on Thanksgiving Day and “Black Friday” sparked concern that shoppers were just buying earlier, threatening revenue later in the season.

“So far, that is not the case,” said Jay Henderson, the strategy director for IBM Smarter Commerce. “Extending the shopping season has really just fueled additional online spending rather than cannibalizing days later in the season.”

ChannelAdvisor said client sales – or sales generated by third-party merchants using the company’s software – soared 57 percent on eBay.com early on Monday, compared with the same period in 2011.

The growth rate was five times higher than during the same period last year, said ChannelAdvisor, which helps merchants sell more online.

“The early eBay numbers are impressive,” said R.J. Hottovy, an equity analyst at Morningstar. “They put together an effective marketing plan across several channels this holiday season – online, television and print.”

EBay has been trying to move away from its online auction roots, emphasizing new items selling at fixed prices to better compete with Amazon.

“The numbers suggest they’re having success reintroducing consumers to the ‘new eBay,’” Hottovy said.

PayPal, the payments division of eBay, said the volume of mobile transactions it processed by 2:00 pm EST on Cyber Monday almost tripled versus the same period last year.

Client sales on Amazon.com were up 52 percent during the first part of Cyber Monday, ChannelAdvisor also reported.

“Amazon continues to look impressive to us since it is building on top of large numbers,” said Scott Tilghman, an analyst at Caris & Company.

Discounts

Online retailers held back some of their best promotions and biggest discounts until Cyber Monday, which helped spur sales, IBM’s Henderson and ChannelAdvisor’s Wingo said.

Amazon offered $30 off its 7 inch Kindle Fire tablet, which usually sells for $159. The deal was only available on Cyber Monday and was still available at 5:00 pm EST.

EBay promoted Cyber Monday deals on iPads, made by Apple Inc, and Nook devices from Barnes & Noble.

These types of discounts attract shoppers to Amazon and eBay’s websites, where they may purchase other items too, Wingo explained.

‘WII U’ sells out

EBay has also benefited as some hot holiday items sold out this year at some retailers. When that happens, shoppers often turn to eBay, where third-party sellers are usually still offering the items at higher prices.

Nintendo Co Ltd said on Monday its new “Wii U” video game consoles sold out at retailers in the United States.

The devices were still available on ebay.com on Monday at 10 to 20 percent above the suggested retail price, according to Jesse Divnich, an analyst at video game research firm EEDAR.

Margin question

Despite strong sales data, analysts are concerned that heavy discounting may pressure retailers’ profit margins, online and offline.

The average online order size on Cyber Monday was $130.30 as of 3:00 pm EST. That was down from almost $200 during the whole of Cyber Monday last year, according to IBM.

Online order sizes are shrinking as consumers buy more digital goods, such as e-books, music and video, which generally cost less. However, discounting is also pressuring order size and that could feed through to lower margins, Morningstar’s Hottovy said.

EBay margins should be relatively well protected because the company charges a commission on sales by third-party merchants and retailers.

Amazon operates like this, but, unlike eBay, the company also has its own product inventory so it may be exposed to margin pressure, according to Colin Sebastian, analyst at R.W. Baird.

source: interaksyon.com