Macy's profit beats Street, but sales continue to slide
The nation's largest department store operator reported mixed results for its third quarter, topping earnings estimates amid tighter inventory controls even as its sales continue to fall.
Net income rose to $36 million, or 12 cents per share, in the third quarter ended Oct. 28, from $17 million, or 5 cents, in the year-ago period. Excluding restructuring costs and other items, Macy’s earned 23 cents per share, beating the average analyst estimate of 19 cents, and up from 17 cents last year.
Sales fell 6.1% to $5.3 billion, more than expected, down from $5.6 billion in the year-ago period. Macy's said the decline, in part, reflected the closure of stores previously announced by the company. Total same-store sales fell 3.6%.
"Macy's has presented a rather mixed bag of results, with gains on the bottom line overshadowed by the continuing slide in sales," said Neil Saunders, managing director, GlobalData Retail. "Admittedly, total sales have been affected by the program of store closures, but the comparable number - which worsened since the last quarter — cannot fall back on the same excuse." For more, click here.
In a statement, Macy's CEO Jeff Gennette struck an upbeat tone, and said the company saw better gross margin performance in the quarter, and continued to experience double-digit growth in digital. He also said the company was encouraged by the potential of Backstage in Macy’s stores, its in-store off-price format.
Macy's reaffirmed its sales and earnings guidance for full-year 2017, citing heightened momentum heading into the holiday shopping season.
"We expect continued improvement in our trends in the fourth quarter, including a solid lift from loyalty and digital, and intend to head into 2018 with momentum,” said Gennette.
Net income rose to $36 million, or 12 cents per share, in the third quarter ended Oct. 28, from $17 million, or 5 cents, in the year-ago period. Excluding restructuring costs and other items, Macy’s earned 23 cents per share, beating the average analyst estimate of 19 cents, and up from 17 cents last year.
Sales fell 6.1% to $5.3 billion, more than expected, down from $5.6 billion in the year-ago period. Macy's said the decline, in part, reflected the closure of stores previously announced by the company. Total same-store sales fell 3.6%.
"Macy's has presented a rather mixed bag of results, with gains on the bottom line overshadowed by the continuing slide in sales," said Neil Saunders, managing director, GlobalData Retail. "Admittedly, total sales have been affected by the program of store closures, but the comparable number - which worsened since the last quarter — cannot fall back on the same excuse." For more, click here.
In a statement, Macy's CEO Jeff Gennette struck an upbeat tone, and said the company saw better gross margin performance in the quarter, and continued to experience double-digit growth in digital. He also said the company was encouraged by the potential of Backstage in Macy’s stores, its in-store off-price format.
Macy's reaffirmed its sales and earnings guidance for full-year 2017, citing heightened momentum heading into the holiday shopping season.
"We expect continued improvement in our trends in the fourth quarter, including a solid lift from loyalty and digital, and intend to head into 2018 with momentum,” said Gennette.