NEW YORK — A year ago, Macy’s Inc. epitomized the nation’s troubled department-store chains.
Sales were mired in a years-long slump amid consumers’ increasing shift to online shopping, drooping mall traffic and competition from lower-priced apparel. Dozens of poorly performing stores were closed. The chain’s stock price had plummeted 65 percent from mid-2015 through last year, and Macy’s named a new chief executive, Jeff Gennette, in early 2017.
Then earlier this year, Macy’s signaled it might be pulling out of its slump.
Macy’s same-store sales rose 1.3 percent in its fiscal fourth quarter ended Feb. 3 compared with a year earlier, the first quarterly gain in three years. A key gauge of a retailer’s health, same-store sales track revenue from stores open at least one year to minimize the effect of stores closing or opening.
Then, in the quarter ended May 5, its same-store sales jumped 3.9 percent from a year earlier, well above analysts’ forecasts.
That gain included the benefit of a promotional event that occurred in the second quarter a year earlier but was shifted to the first quarter of this year. Even after excluding that benefit, Macy’s same-store sales were up 1.7 percent.
Macy’s also raised its projections for its full-year fiscal 2018 results. Investors, anticipating further improvement, have bid up Macy’s stock by nearly 70 percent in the last 12 months, outpacing the 50 percent gain in the S&P retail index over the same period.
The stock of Kohl’s Corp. has soared 79 percent in the last 12 months as that chain also has rebounded. But some others are still floundering, such as J.C. Penney Co., whose stock has plummeted 55 percent in the last 12 months — to less than $3 a share — as that middle-market retailer still struggles with flagging sales.
For Cincinnati-based Macy’s, two quarters do not necessarily make a trend, and some analysts remain skeptical whether Macy’s can sustain its growth over the long term, especially if consumer spending slows from its current robust rate.
“We fear that regaining market share in a highly competitive space is difficult to achieve” for Macy’s, Morningstar analyst Jaime Katz said in a note to clients after Macy’s first-quarter results were announced. “We have Macy’s continuing to trail overall apparel-market growth.”
For now, though, Macy’s is benefiting from external factors and strategic moves by Gennette, who spent most of his career at the chain before getting the CEO post.
Macy’s, with fiscal 2017 sales of $24.8 billion, operates about 850 stores nationwide. Its store brands include Macy’s, Bloomingdale’s and Bluemercury, an upscale beauty chain.