What: Saks CEO, Marc Metrick discusses Saks’ Q2 perfomance and future expectations.

Why it is important: The CEO provides a comprehensive insight to Saks’ Q2 performance and how the company was able to increase net profit even though there was a decline in sales.

In the second quarter of 2023, Saks experienced an 11% decline in top-line revenue. However, the company achieved higher profitability by focusing on improving margin and inventory management, as well as implementing staff cutbacks in their store and website.

Saks.com saw a two-year stacked growth of 24% and a 114 % increase compared to Q2 2019; the gross merchandising value (GMV) for saks.com still fell by 11% compared to Q2 2022. Similarly, GMV for Saks Fifth Avenue stores dropped by 11% during the same period. The top-selling categories at the stores were men's and women's contemporary sportswear, and the top-performing markets were New York and Florida.

During the quarter, Saks successfully executed a strategy of separating its store fleet and e-commerce business. Positive performance was observed in comparable sales compared to the second half of the previous year. Spending among core luxury consumers is starting to return, with 64% of those earning USD 200,000 or more planning to spend the same or more on luxury in the next three months. This indicates an increase in luxury spending among higher-income shoppers. The company holds positive expectations for the upcoming holiday season.

Saks CEO on Q2: Profits up despite double-digit top-line drop