Holiday Central

Macy's CEO sees Black Friday traffic stronger than last year, with fewer promotions

Key Points
  • The holiday selling season is off to a "strong start," Macy's CEO Jeff Gennette told CNBC.
  • Coat, boot and sweater sales were all trending well on Black Friday, according to Gennette.
  • The CEO also said there was higher traffic inside Macy's flagship Herald Square location in New York, when compared with last year.
Macy's CEO: We have a 5-week marathon ahead of us, we've got to earn our dollar every day

The holiday selling season is off to a "strong start," Macy's CEO Jeff Gennette told CNBC the morning of Black Friday.

"We're four weeks into it, with five weeks ahead of us," he said on "Squawk on the Street" about the final sales period of 2017. "Some interesting items are [already] selling out in stores."

Gennette said the retailer is a "better destination with better experiences," and is in a stronger position when compared with how Macy's was performing last year.

Promotions are also less severe, he said, which could entail better profit margins in the company's fourth quarter.

Department stores have been having a tough year — marked by store closings, deep discounting and falling stock prices — as more shoppers buy items online and make fewer trips to the mall. Macy's has forecast total comparable sales to decline by 2.2 to 3.3 percent in fiscal 2017. Annual revenue is projected by the department store chain to fall by 3.2 to 4.3 percent.

That means a lot is at stake this holiday season. Gennette said higher margin coats, boots and sweaters have been selling well. Fragrances were also popular.

Shares of multiple department store chains were climbing Friday morning on holiday sales optimism. Macy's stock was up more than 4 percent, Kohl's was up nearly 3 percent and J.C. Penney was climbing close to 2 percent.

"We're looking at new opportunities to bring traffic into stores," the CEO told CNBC about Macy's future initiatives. "Customers love experiences when they come into the building."

One example of Macy's bringing in experiences is a recent partnership with Samsung, where the retailer now sells some of Samsung's virtual reality and smart home products from its Herald Square location in New York. Macy's is also investing in its off-price Backstage concept, its revamped loyalty program and its beauty business with Bluemercury.

Standing inside Macy's flagship Herald Square store Friday morning, Gennette explained that there was a surge in traffic Thursday evening, when doors opened at 5 p.m. He said sales were looking to be higher, considering the Northeast has been "blessed ... with cold weather."

The National Retail Federation has forecast total holiday retail sales to climb 3.6 to 4 percent in 2017. This year, Christmas comes 32 days after Thanksgiving, giving shoppers an extra weekend day to complete their shopping.