Macy's (M) is scheduled to report results of its second fiscal quarter before the market open on Wednesday, August 15, with a conference call scheduled for 9:30 am EDT. What to watch for: 1. TURNAROUND: Last year, Macy's CEO Jeff Gennette said he was "committed" to stabilizing its brick and mortar business, and that customers had been confused by "very complex" pricing. Earlier this year, the company said it has also developed an employee incentive program to drive results and engagement with associates at every level of the organization, with an emphasis on its hourly associates. Evercore ISI analyst Omar Saad said Macy's has improved customer engagement through a revamped and expanded loyalty program, leveraging social media, rolling out omni-channel capabilities, and testing more open-sell formats. The analyst is also encouraged by Macy's focus to better leverage social media by creating unique content that highlights the company's "fashion authority" and increasing engagement with customers. 2. COMPETITIVE LANDSCAPE: Macy's has been faced with competition from fast-fashion retailers like H&M, as well as an increase in online shopping on Amazon.com (AMZN). Macy's and other retailers are also looking to delve further into the beauty products market in a move to compete with Amazon and brick-and-mortar retailers like Wal-Mart (WMT) and Target (TGT). The current promotional environment as well as tourism sales and a shift to e-commerce has been a focus for many retailers as of late. CNBC said in July that retailers were starting to plan their own promotional events around Amazon's annual shopping event. Coresight Research estimated Prime Day 2018 sales reaching at least $3.4B globally, the report noted. In a move to compete with Ulta (ULTA) and Sephora, Macy's is planning to open roughly 60 new standalone Bluemercury stores through 2019 maintaining the chain's pace of expansion, Bloomberg said in July. 3. GUIDANCE: In May, Macy's raised fiscal 2018 adjusted earnings per share view to $3.75-$3.95 from $3.55-$3.75, above analysts' expectations at the time of $3.61, though the consensus has since moved higher to $3.87. Total sales are now expected to be down 1% to up 0.5%, against analysts' current estimates of $24.89B. Comparable sales on an owned plus licensed basis are expected to increase between 1%-2%, while comparable sales on an owned basis are expected to be 20-30 basis points below comparable sales on an owned plus licensed basis. Macy's previously forecast comparable sales on both an owned and an owned plus licensed basis to be flat to up 1%, while total sales were expected to be down between 0.5%-2%. At the time, Macy's said it still expected comp sales in 2H to be higher than 1H. At the time, CEO Gennette said "This is the most competitive retail environment I've ever seen." 4. EXECUTIVE CHANGES: In May, Macy's named Paula Price as its next CFO, effective July 9, succeeding Karen Hoguet who previously announced plans to retire at the end of the 2018 fiscal year. Hoguet will remain with Macy's in an advisory role to support the company during a transition period until February 2, 2019. Additionally, Macy's Naveen Krishna as its chief technology officer. Most recently, Krishna was vice president of technology for The Home Depot (HD).
