Macy's reports double-digit growth in its digital business
The digital transformation and corporate turnaround efforts going on at Macy's has led to another strong quarter for the once beleaguered retailer.
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The Cincinnati-based department store chain said it had Q1 earnings of 42 cents a share on revenue of $5.54 billion, up 3.6 percent. Analysts had expected profit of 35 cents per share and revenue of $5.39 billion. Shares of Macy's were up as much as 13 percent following the report.
Sales at Macy's stores open more than 12 months, including in departments licensed to third parties, climbed 4.2 percent over the quarter, topping analyst estimates.
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"The winning formula for Macy's is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience," said Macy's CEO Jeff Gennette in a press release. "While we have more work to do, the continuing improvement in our stores is encouraging and we once again achieved double-digit growth in the digital business."
Gannette also stressed the importance of the company's turnaround effort called the "North Star" strategy and its revamped merchandising and marketing operations for the better-than-expected quarter.
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Meanwhile, Gannette said Macy's has also expanded its use of virtual and augmented reality to help grow its furniture business. The retailer has piloted VR in three of its furniture stores and found that it helped increase transaction size and reduce returns. The VR pilot will scale to 60 more stores this year, Gannette said. An augmented reality feature is currently in testing on Macy's mobile app.
As for guidance, Macy's is raising its profit forecast for fiscal 2018. Macy's now expects adjusted profit of $3.75 to $3.95 per share, up from its previous forecast of $3.55 to $3.75 per share.
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