Macy’s Slow in 2Q

Macy’s Inc. (Cincinnati) has vowed to boost marketing efforts after reporting disappointing second quarter results and trimming its full-year earnings forecast.

Quarterly profits were up less than 1 percent, sales fell 0.8 percent and second-quarter transactions across the 840-unit chain, which the company considers a proxy for traffic, declined 1.6 percent.

“We believe much of our weakness is due to the health of the consumer and to the fact that the consumer is choosing to make purchases in non-department store categories such as cars, housing and home improvement,” said cfo Karen Hoguet.

She said a shift away from higher margin items like cosmetics, jewelry and watches toward lower-margin apparel in the second quarter also hurt sales. Other factors included steeper and earlier promotions by competitors.

“We may have waited a bit too long to start marking down warm-weather goods,” Hoguet acknowledged. Like other retailers, Macy’s had to discount to clear merchandise after a cool spring hurt summer merchandise sales.

She added that new banking regulations implemented after the financial crisis are making it harder for Macy's to sign up new credit-card customers.