Macy’s blows past Q1 estimates, raises full-year outlook
Coming out of a strong holiday season, Macy’s reported a stellar performance for its first quarter that easily topped Street estimates.
Macy’s Inc. shares soared 10% in Wednesday premarket trading after the department store retailer reported first-quarter earnings that blew past consensus.
Net income rose to $139 million, or 45 cents per share, in the quarter ended May 5, up from $78 million, or 26 cents per share, in the year-ago period. Adjusted earnings per share came in at 48 cents, better than the 36 cents that analysts had forecast.
Sales rose to $5.54 billion, up from $5.35 billion last year, and besting analysts’ estimates of $5.43 billion. Total same-store sales increased 4.2%, easily beating the 1.4% increase analysts had expected. Same-store sales on an owned basis rose 3.9%.
The retailer said it experienced double-digit growth in its digital business.
“We exceeded our expectations and saw strong performance across all three brands — Macy’s, Bloomingdale’s, and Bluemercury — as well as across all geographic regions and families of business,” said Jeff Gennette, Macy’s chairman and CEO. “We are maintaining a healthy inventory position, which helped us deliver improved gross margin. The winning formula for Macy’s, Inc. is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience.”
In comments, Neil Saunders, managing director of GlobalData Retail, said that Macy’s first quarter sales results suggest that the company’s recovery is gaining momentum.
“After a good holiday season, there was a question as to whether Macy’s could continue to deliver a recovery,” Saunders said. “Today’s results answer in the affirmative, with solid progress on both the top and bottom lines.”
Macy’s said it is ending its joint venture with Fung Retailing Limited in China. Instead, it will remain active on Alibaba’s Tmall platform and social media channels.
Macy’s now expects fiscal 2018 earnings per share of $3.75 to $3.95, excluding the anticipated settlement of charges tied to benefit plans and other charges. This is 20 cents higher than previous guidance and ahead of analysts’ projection of $3.61.
Sales are expected to range from a 1% decline to a 0.5% increase. And same-store sales on an owned-plus-licensed are expected to be up 1% to 2%.
No comments found