RILA warns of ‘three-front trade war’

For the first quarter, net sales were $540.9 million compared to $388.0 million in last year's first quarter. This 39.4% improvement primarily reflects a comparable sales increase of 40.6%, partially offset by 29 permanent store closures since last year's first quarter. The 40.6% comparable sales improvement was driven by an increase in transaction count and higher average dollar sale. Gross margin was $216.6 million, or 40.0% of net sales, compared to $126.8 million, or 32.7% of net sales, in last year's first quarter. The 730-basis point improvement in gross margin rate primarily reflects higher average unit retail and full price sales combined with occupancy leverage that offset elevated raw material and freight costs. At the end of the first quarter, inventories totaled $325.6 million compared to $209.7 million at the end of last year's first quarter. The $115.9 million, or 55.3%, increase from last year's first quarter primarily reflects elevated on-hand inventories to align with higher consumer demand, an increase in in-transit inventories due to extended in-transit times in the global supply chain, strategic investments in basics and replenishment inventories, and higher average unit costs.

U.S. online sales will reach $794.50 billion this year, up 32.4% year-over-year and accounting for 14.4% of all retail spending. That’s according to eMarketer’s third-quarter forecast, which also predicts that E-commerce sales will reach 19.2% of all U.S. retail spending by 2024. The increase for 2020 is much higher than the 18.0% gain predicted in the company’s second-quarter forecast as consumers continue to opt for online shopping amid the pandemic. Online shopping is so strong that it will more than offset the 3.2% decline in brick-and-mortar spending this year, which will drop to $4.711 trillion, reported eMarketer. As a result, total U.S. retail sales in the US will remain essentially flat.

Macy’s, Inc. announced details of a restructuring that will align its cost base with anticipated near-term sales as the business recovers from the impact of the COVID-19 pandemic, including the closure of stores from March 18 through May 4, 2020 and gradual re-opening. The company will reduce corporate and management headcount by approximately 3,900. Additionally, Macy’s, Inc. has reduced staffing across its stores portfolio, supply chain and customer support network, which it will adjust as sales recover. The company expects the actions announced to generate expense savings of approximately $365 million in fiscal 2020 and approximately $630 million on an annualized basis. These savings will be additive to the anticipated $1.5 billion in annual expense savings announced in February, which the company expects to fully realize by year-end 2022.