Macy’s Inc. is inching back toward normalcy as it approaches the critical holiday season, posting profit that beat expectations in the second quarter.

• The department store’s adjusted net loss of US$251 million was well ahead of the US$538 million loss anticipated by analysts. Comparable sales in the quarter ended Aug. 1, a key measure of retailer performance, fell 35 per cent, roughly in line with expectations as it tries to recover from a sharper decline earlier in the pandemic.

Key Insights

• Chief Executive Officer Jeff Gennette said performance was stronger than the company expected across its three brands -- Macy’s, Bloomingdale’s and Bluemercury -- “driven largely by the sales recovery of our stores.” That may seem a bit incongruous with net sales that were down 36 per cent year-over-year, but the drop was a marked improvement from the first quarter.
• With most of its stores reopened by the end of June, including Macy’s crucial Manhattan flagship, Gennette said his top priority is now the holiday season. He said he’s approaching the vital shopping period “conservatively,” and the company declined to provide an outlook for the rest of the year.
• Online sales provided the retailer a needed boost, up 53 per cent for the quarter. That spike was better than executives expected.

Market Reaction

• The shares rose 5.3 per cent before the start of regular trading in New York. They had fallen 59 per cent through Tuesday’s close.