Macy’s, which is known for kicking off the holiday season with its nationally televised Thanksgiving Day parade, is painting a picture of a holiday season unlike any other.
As the country grapples with the global coronavirus pandemic, CEO Jeff Gennette said Wednesday he is anticipating a more drawn-out holiday season — with shopping kicking off in earnest prior to Turkey Day.
And with fewer activities to do and events to attend, Macy’s also expects consumers won’t be exchanging so-called experiential gifts like Broadway tickets. Instead, Gennette is predicting categories like beauty and home to be trending for gift-giving.
“America comes to us for celebration,” he said during a call with analysts. “We are reimagining our iconic events that deliver the magic of the holidays from the Thanksgiving Day parade, and local tree lightings and holiday windows.”
“We had a successful gifting strategy for holiday of 2019, and we’re building on that for 2020, and believe the shift away from experiential gifting provides some upside for us,” he added.
Another challenge for retailers shaping up for the holidays are supply-chain constraints, as companies scramble to place orders for merchandise and stock their shelves before it’s too late, such as another wave of Covid-19 hitting the U.S.
“We are seeing bottlenecks in the port, as well as challenges with ground freight,” Macy’s interim Chief Financial Officer Felicia Williams said.
Even with such intense competition this holiday season, however, and a slew of going-out-of-business sales still taking place, Macy’s does not think it will need to heavily discount items. Some of its peers, like Kohl’s, have hinted at a more promotional environment during the fourth quarter.
“I do not expect this holiday season to be more promotional than last,” Gennette said in a phone interview. “The promotional activity is just drawn out over a longer period of time.”
Macy’s shares were down 0.7% on Wednesday afternoon, turning lower despite the retailer’s better-than-expected earnings results reported before the opening bell. Its digital sales were up 53% during the second quarter, and Macy’s found strength in luxury through its Bloomingdale’s business. Macy’s swung to a loss overall, however, and its net sales were down about 36%.