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Macy’s 2Q profit falls short; sales outlook cut

By WTOP Staff

ANNE D’INNOCENZIO
AP Retail Writer

NEW YORK (AP) — Macy’s Inc. on Wednesday reported a 4 percent profit increase in its fiscal second quarter as business rebounded from slow sales earlier in the year.

But the department store chain cut its full-year outlook for a key sales measure, saying it couldn’t make up the sales shortfall from the first quarter, when winter storms kept shoppers at home.

Shares of Macy’s tumbled nearly 5 percent, or $2.83, to $56.93 in trading Wednesday.

Macy’s, a standout among its peers throughout the economic recovery, is the first of the major retailers to report second-quarter results, which should provide insight into shoppers’ mindset heading into the critical final months of the year. Wal-Mart Stores Inc., Nordstrom Inc., Kohl’s Inc. and J.C. Penney Co. are set to report their results Thursday.

Like many retailers catering to the middle class, Macy’s is facing economic challenges. While the job market is improving and the housing market is rebounding, the gains are not strong enough to sustain big shopping sprees.

Macy’s said Wednesday that it’s been pleased with the start to the back-to-school season, which typically begins mid-July and ends in mid-September. But Macy’s said it needs to continue to discount to bring shoppers in.

“Our outlook for the fall season reflects our confident optimism tempered with the reality that many customers are feeling the impact of an economic environment that, at best, is improving very gradually,” Chief Financial Officer Karen Hoguet told investors during a conference call Wednesday.

Still, Macy’s, which also operates the upscale chain Bloomingdale’s, has benefited from its focus on tailoring merchandise to local markets. It’s also aiming to create a more seamless experience for shoppers who are going back and forth from stores to websites.

Macy’s, which has corporate offices in Cincinnati and New York, said it just finished rolling out a program that allows shoppers to order online and then pick up items at stores. The company also said that its sharpened marketing and merchandising aimed at 13- to 30-year-old customers has re-energized the back-to-school business.

Macy’s said its second-quarter net income increased to $292 million, or 80 cents per share, from $281 million, or 72 cents per share, in the same quarter a year earlier. The average estimate of analysts surveyed by Zacks Investment Research was for profit of 86 cents per share.

The company said revenue rose 3.3 percent to $6.27 billion from $6.07 billion in the same quarter a year earlier, but missed Wall Street forecasts. Analysts expected $6.29 billion, according to Zacks.

Macy’s said that sales at stores open at least a year rose 4 percent. The figure includes business from departments licensed to third parties. But Macy’s said that it now expects that measure to increase by 2 percent to 2.5 percent for the year, down from its previous projection of 2.5 percent to 3 percent.

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Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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