Macy’s Q1 earnings rise 38%, beat Street but outlook disappoints
Cincinnati — Macy’s Inc. reported a better-than-expected 38% increase in its first-quarter profit as the chain continues to benefit from its move to target its offerings to local markets. However, the retailer disappointed the Street by failing to up its guidance for the year.
Macy’s said that its net income rose to $181 million for the three-month period ended April 28, up from $131 million a year ago.
Revenue increased 4.3% to $6.14 billion, from $5.89 billion a year ago. Same-store sales were up 4.4%.
Online sales (macys.com and bloomingdales.com combined) were up 33.7% in first quarter 2012. (Online sales are included in the same-store sales calculation for Macy’s.)
“The momentum in our business at Macy’s and Bloomingdale’s continued to build in the first quarter, with sales and earnings exceeding our expectations going into the year,” Terry J. Lundgren, Macy’s chairman, president and CEO, said in a statement. “The quarterly data clearly demonstrates the strength of our results as we continue to implement our strategies.”
Bed Bath & Beyond to acquire Cost Plus
Union, N.J. — Bed Bath & Beyond Inc. said that it has reached a definitive agreement to acquire Cost Plus in an all cash transaction. The deal is valued at some $495 million, according to Reuters.
Based in Oakland, Calif., Cost Plus currently operates 259 stores under the names World Market, Cost Plus World Market, Cost Plus Imports, and World Market Stores in 30 states.
“We are thrilled about the prospects of welcoming the Cost Plus team and their customers and vendors to the Bed Bath & Beyond family,” said Steven H. Temares, CEO and member of the board of directors of Bed Bath & Beyond.
The boards of directors of both companies have unanimously approved the terms of the transaction, which is expected to close during Bed Bath & Beyond’s fiscal second quarter. Cost Plus will continue to be headquartered in Oakland following the transaction.
Online sales give Macy’s a big boost in Q1
CINCINNATI — Macy’s Inc. reported a significant increase in sales for the first quarter, thanks to a strong performance in its online business. The company reported that total sales for the quarter increased 4.3% to $6.1 billion. Online sales for the quarter increased 33.7% and contributed 1.5 percentage points to the company’s same-store sales increase of 4.4% for the period.
Macy’s Inc. reported an earnings increase of 43% to 43 cents per diluted share, compared with 30 cents per diluted share in the same period last year.
In the first quarter of 2012, Macy’s opened new stores in Salt Lake City, Utah, and Greendale, Wis.
"The momentum in our business at Macy’s and Bloomingdale’s continued to build in the first quarter, with sales and earnings that exceeded our expectations going into the year. The quarterly data clearly demonstrates the strength of our results as we continue to implement our key strategies – My Macy’s merchandise localization; omnichannel integration of stores, online and mobile; and MAGIC Selling for enhanced customer engagement," said Terry Lundgren, Macy’s Inc. chairman, president and CEO.
Macy’s Inc. is now expecting same-store sales for fiscal 2012 to increase by approximately 3.7%, slightly higher than previous guidance for a same-stores sales increase of approximately 3.5% in fiscal 2012. The company reiterates its guidance for earnings per diluted share in fiscal 2012 of $3.25 to $3.30.