M Macys Inc

By Tatyana Shumsky 

Macy's Inc. has named Paula Price, the former finance chief of the parent of grocery chains Peapod, Stop & Shop and Giant Food, as its new chief financial officer.

She replaces Macy's longtime CFO Karen Hoguet, who is retiring on Feb. 2, 2019.

Ms. Price will join the Cincinnati-based retailer on July 9. Several analysts said they expect her to retain the retailer's current financial strategy as it navigates through the sector's turmoil as consumers buy more of their purchases online. While Ms. Price hasn't served as a company executive since her tenure as CFO of Ahold U.S.A. Inc., she is a director on several boards.

Ms. Price's appointment comes as Macy's snapped out of three-year losing streak in same-store sales, posting two straight quarters of growth. Macy's raised its 2018 outlook after first-quarter earnings beat analyst expectations, and now forecasts earnings for the year of between $3.75 and $3.95 a share, a 20-cent increase over its previous outlook.

The change at Macy's was set off by its current CFO Ms. Hoguet, who in April announced plans to retire after more than 20 years in the role. Over the past 18 months, several other top retailers have named new finance chiefs, including Neiman Marcus Group Ltd LLC., J.C. Penney Co. Inc., Gap Inc. and Tapestly Inc. (formerly Coach Inc.).

"If you're Macy's and you're looking at the landscape and you can't pry out those people [from your rivals] because they're new, you start thinking creatively," said Peter Crist, chairman for executive recruiter Crist|Kolder.

Ms. Price is currently a full-time senior lecturer at Harvard Business School, a role she has held since 2014. She also serves as a director on the board of consulting firm Accenture PLC, where she chairs the audit committee and is a member of the compensation committee. She is a director on the boards of Western Digital Corp., Blue Cross Blue Shield of Massachusetts and the Financial Guaranty Insurance Company. Ms. Price resigned from the board of Dollar General Corp. on May 17. Before her stint at Ahold, Ms. Price was controller and chief accounting officer at CVS Caremark Corp.

"She's on several boards in eclectic businesses which keeps you very sharp intellectually because you're engaging with different companies, different problems, different markets everyday," said Mr. Crist, the executive recruiter. "The wrote skills of being a CFO -- the accounting, the planning, the work ethic -- you never lose that, and that's really your staff."

Ms. Price is the latest executive hire at Macy's, which has seen several changes to its top leadership in recent months. These include new President Hal Lawton, chief product and digital revenue officer Jill Ramsey and new Chief Human Resources Officer Danielle Kirgan.

"Paula Price has an impressive breadth and variety of finance experience, which gives her a unique perspective and makes her a great fit for Macy's," a Macy's spokeswoman said in emailed message. "We expect a seamless transition as Karen Hoguet will remain with the company in an advisory role through the end of fiscal 2018."

It is unlikely that Ms. Price will dramatically change the finance strategy her predecessor put in place at Macy's, said Chuck Grom, retail analyst at Gordon Haskett Research Advisors.

"I'd imagine Paula's going to use a similar playbook," Mr. Grom said. Ms. Houget was "extremely disciplined with capital management, paying down debt, being opportunistic with asset sales," he added.

Ms. Houget, who had served as the retailer's CFO since 1997, helped Macy's navigate two challenging periods, including the 2009 recession and the recent pressure on the retail sector, Mr. Grom said. "Karen has done a superb job over her 20 year period," he said.

Macy's recent success also comes on the back of efforts such as remodeling roughly 50 stores to include food offerings and upgraded fixtures and the Macy's Backstage initiative, which added an off-price, store-within-a-store at 45 locations in 2017, with more locations expected this year.

The challenge for Ms. Price instead will be to explain to investors what is behind the turnaround at Macy's, said Bill Dreher, analyst at Susquehanna Financial Group.

"What investors are trying to get to the bottom of is how much of the earnings power that we're seeing comes from a turnaround in core operations and how much of it is benefiting from asset sales and other nonrecurring revenue," Mr. Dreher said.

Write to Tatyana Shumsky at tatyana.shumsky@wsj.com

(END) Dow Jones Newswires

May 24, 2018 16:58 ET (20:58 GMT)

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