Bloomingdale's posts record Q2 sales volume as Macy's Inc. takes share from Saks

Bloomingdale's recorded the best second-quarter sales volume in its history, according to an earnings presentation from parent company Macy's Inc. released Thursday. Comparable sales grew more than 11%, an increase of about 1,700 basis points over the past two years, which chief executive Tony Spring called a significant step change.

Sales of owned plus licensed goods at Bloomingdale's reached $922 million for the quarter. Growth came across all channels, markets and categories, with Spring citing particular outperformance in ready to wear, men's apparel, fine jewellery, fragrances and tabletop as the strongest categories in the period.

Fitch Ratings senior director David Silverman said Bloomingdale's benefited in the quarter from its own initiatives as well as share loss at Saks and Neiman Marcus, a pattern that was pronounced last year and continued through the holiday quarter. GlobalData managing director Neil Saunders called the disruption at Saks a real but insufficient explanation on its own.

Where the growth is coming from

Bloomingdale's has been revamping its assortment, adding Ulla Johnson, Proenza Schouler and Dries Van Noten, and expanding distribution of James Perse, Chanel fine jewellery and watches, Christian Louboutin and Prada shoes. It also held more of what Spring called its widely popular in-store events at most locations.

The retailer launched an AI powered conversational e-commerce shopping assistant during the quarter. Spring said the results reflect Bloomingdale's differentiated and unique positioning from premium contemporary to luxury, with a clear emphasis on discovery, newness and experiences for shoppers.

Saks Fifth Avenue, a premier luxury department store chain in the United States specialising in high end fashion, accessories and beauty, has been working through a post-bankruptcy turnaround this summer under its parent, formerly Saks Global and now renamed Exemplar Luxury Group. Neiman Marcus is under the same ownership.

Saunders said the disruption at Saks and elsewhere has provided some benefit to Bloomingdale's, but called it nowhere near sufficient to produce the numbers the retailer is churning out. He described the quarter as an endorsement of everything the team has been doing to strengthen the customer experience.

The wider Macy's Inc. picture

Across Macy's Inc., net sales rose 1.1% year on year to $4.9 billion, with total comparable sales up 2.7%. At the namesake Macy's banner comparable sales grew 1.1%, and at its 200 revamped stores comps rose nearly 2%. Bluemercury comps rose more than 6%.

Gross margin at Macy's Inc. expanded by 180 basis points to 41.5%, helped by tariff refunds against tariff and fuel cost headwinds. Stripped of the refunds, gross margin was up just 10 basis points. Net income nearly doubled year on year to $169 million.

Macy's Inc. received $116 million in tariff refunds, all of what it expected, and will put about $20 million of that toward earnings. The rest goes toward brand building, speeding store overhauls and mitigating fuel volatility, with a small portion cutting prices on furniture and fine jewellery.

Spring told analysts the quarter marked six straight periods of better than expected results, five straight quarters of comparable sales growth and two straight quarters of net sales growth. Evercore ISI analyst Michael Binetti endorsed the approach, saying he preferred it to rivals cutting prices to compete.

We reported that Macy's and Vince both raised their full year outlook after a strong second quarter, and this release extends that pattern with a stronger showing from Bloomingdale's specifically. Emarketer vice president Suzy Davidkhanian said Macy's mix of sought after brands and private label is helping drive demand.

We have also tracked the legal pressure building on Saks, after Saks.com faced a proposed class action over promotional texts sent before 8am, part of a wider run of difficulty for the chain beyond the market share Bloomingdale's is now taking from it.

Davidkhanian added that operational discipline is showing up in the results and that the mix bodes well for the holiday season, when department stores traditionally shine as gift destinations. Macy's Inc. will hold its 100th Thanksgiving Day parade this year, which Spring noted is less than 77 days away.

Spring said the Bloomingdale's initiatives position the retailer to continue gaining market share across brands, categories and regions, pointing to growth in its very important client programme for its highest spending customers. The namesake Macy's banner remains, in the company's own description, a work in progress.

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Image: Bloomingdale's