Department store chain Macy's said Thursday that sales slipped in the third quarter, the 11th consecutive quarterly sales decrease for a company struggling to find its footing in a rapidly shifting retail landscape.
Despite the falloff, Macy's said it managed to increase profit for the quarter by controlling inventory and selling off more stores.
The company said reducing its store count helped feed a 6 percent drop in total sales for the quarter to $5.3 billion. Comparable sales were down 3.6 percent for the quarter; Macy's did not provide a dollar figure for that category.
Net income more than doubled for the quarter, to $36 million from $17 million a year ago, the company said. On a per-share basis, earnings rose to 23 cents, excluding one-time charges, from 17 cents a year ago, beating Wall Street expectations.
Investors appeared to take heart in the results. Macy's shares, which had fallen more than 50 percent this year, were up nearly 10 percent at midday.
Macy's and other traditional retailers face a crucial test in the coming Christmas season, particularly online. As fewer people shop in stores, Macy's has tried to use its vast store network to fulfill orders placed online.
The retailer said its online business grew by "double digits" in the third quarter. Still, it has a long way to go to catch up with Amazon, which is poised to become the nation's largest apparel retailer.
Macy's continues to shrink its physical presence by closing and selling off stores. The company said Thursday that it would close three more stores, in Laguna Hills, Calif., Los Angeles and San Francisco, early next year.
Macy's is also under intense pressure from retailers such as TJ Maxx that have pummeled traditional department stores by undercutting them on price. Macy's has responded by opening off-price stores-within-stores under the Backstage name at some locations.
Jeff Gennette, the company's chief executive, said Thursday that he was encouraged by the overall third-quarter results, including the Backstage brand's potential.
"We are excited about our plans for the holiday, which is when Macy's truly shines as a gifting destination," Gennette said.
It's been a tough year for retail overall, with store closings on pace to top the worst year of the recession and several well-known chains filing for bankruptcy protection because of their debts. Mall shopping is down, and that hits department store chains particularly hard.
Most Macy's stores will open at 5 p.m. on Thanksgiving and close at 2 a.m., similar to last year. They will reopen 6 a.m. on Black Friday. Macy's is increasing the number of temporary workers it's hiring for distribution and warehouses for the Christmas season as it chases fast-growing e-commerce sales.
Macy's shares rose $1.93, or 11 percent, to close Thursday at $19.50.
Information for this article was contributed by Anne D'Innocenzio of The Associated Press.
Business on 11/10/2017