Macy’s Q2 tops estimates but sales fall
The nation’s largest department store retailer reported better-than-expected results for its second quarter and rose its forecast for the full year.
Net income totaled $166 million, or 53 cents per share, for the quarter ended August 4, up from $111 million, or 36 cents per share, for the same period last year. Adjusted EPS was 59 cents, more than the Street had forecast.
Sales totaled $5.57 billion, down from $5.64 billion last year.
Analysts had expected sales of $5.55 billion. Same-store sales on an owned basis were flat, and were up 0.5% on an owned-plus-licensed basis. It was the chain’s third consecutive quarter of same-store sales growth.
While the Street reacted negatively to the decline in sales, analyst Neil Saunders, managing director of GlobalData Retail, said there were reasons for the apparent slowdown.
“Foremost among these is the shift in the promotional calendar, most notably to the spring Friends & Family event; this boosted first-quarter trade and negatively impacted this quarter,” he said. “When the effects of this move are taken into account, comparable sales rose by a more respectable 2.9% on an owned and licensed basis.”
Jeff Gennette, Macy's chairman and CEO, said that Macy's, Bloomingdale's and Bluemercury all performed well, and that “it is encouraging to see the continued strengthening of our brick-and-mortar business where we saw trend improvements across the portfolio.”
“We also continue to be disciplined with inventory management, which allows us to give our customers more fashion and freshness, while increasing sales and improving gross margin,” he said. For more commentary, click here.
Macy's said it now expects adjusted EPS of $3.95 to $4.15 for fiscal 2018, up from previous guidance of $3.75 to $3.95. Sales are expected to range from flat to 0.7% growth. And same-store sales on an owned-plus-licensed basis are expected to increase 2% to 2.5%.
Net income totaled $166 million, or 53 cents per share, for the quarter ended August 4, up from $111 million, or 36 cents per share, for the same period last year. Adjusted EPS was 59 cents, more than the Street had forecast.
Sales totaled $5.57 billion, down from $5.64 billion last year.
Analysts had expected sales of $5.55 billion. Same-store sales on an owned basis were flat, and were up 0.5% on an owned-plus-licensed basis. It was the chain’s third consecutive quarter of same-store sales growth.
While the Street reacted negatively to the decline in sales, analyst Neil Saunders, managing director of GlobalData Retail, said there were reasons for the apparent slowdown.
“Foremost among these is the shift in the promotional calendar, most notably to the spring Friends & Family event; this boosted first-quarter trade and negatively impacted this quarter,” he said. “When the effects of this move are taken into account, comparable sales rose by a more respectable 2.9% on an owned and licensed basis.”
Jeff Gennette, Macy's chairman and CEO, said that Macy's, Bloomingdale's and Bluemercury all performed well, and that “it is encouraging to see the continued strengthening of our brick-and-mortar business where we saw trend improvements across the portfolio.”
“We also continue to be disciplined with inventory management, which allows us to give our customers more fashion and freshness, while increasing sales and improving gross margin,” he said. For more commentary, click here.
Macy's said it now expects adjusted EPS of $3.95 to $4.15 for fiscal 2018, up from previous guidance of $3.75 to $3.95. Sales are expected to range from flat to 0.7% growth. And same-store sales on an owned-plus-licensed basis are expected to increase 2% to 2.5%.