Macy's same-store sales growth trumps estimates, shares rise

Macy's same-store sales growth trumps estimates, shares rise

Net income climbed to $139 million, or 45 cents per share, in the period ended May 5, from $78 million, or 26 cents a share, a year ago. Zacks Investment Research raised shares of Macy's from a hold rating to a buy rating and set a $28.00 target price on the stock in a research note on Wednesday, January 10th.

Executives told investors the changes were paying off as planed, drawing more shoppers online and in stores and boosting sales overall. It's also testing more curated merchandise displays and localized marketing. "Our best customer is responding well to the improvements we've made to her experience in our stores, and through the Macy's app." . We exceeded our expectations and saw strong performance across all three brands-Macy's, Bloomingdale's, and Bluemercury-in addition to across all geographic regions and families of business. That robust growth followed upbeat holiday sales results by Macy's, providing more convincing evidence that the beleaguered chain might finally be getting on steadier footing. We also saw continued healthy consumer spending and significant improvements in global tourism. We are maintaining a healthy inventory position, which helped us deliver improved gross margin. The company has come to a mutual agreement to end the joint venture with Fung Retailing Limited. And I still wonder just how much growth Macy's can wring out of key initiatives such as Backstage, the off-price section it's adding to many Macy's locations. Measures of consumer confidence remain mostly healthy. (NYSE:M) in the first quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC).

Looks like less store clutter as well as less emphasis on discounts, discounts, discounts is working for Macy's.

The company said it now expects adjusted profit of $3.75 to $3.95 per share for the year, up from a previous forecast of $3.55 to $3.75.

Excluding impairment and other one-time costs, Macy's earned $0.48 per share, $0.11 higher compared with what analysts had anticipated. Also apart from asset sale gains, earnings per diluted share attributable to Macy's, Inc. were $0.42 in the first quarter of 2018.

Still, Macy's stock is now up almost 30% this year, a clear sign that many on Wall Street also believe that Macy's is back on track.

Macy's same-store sales on an owned basis grew 3.9%, and by 4.2% on an owned-plus-licensed basis, well above the FactSet consensus for a same-store sales increase of 0.7%. American International Group Inc. now owns 23,923,612 shares of the company's stock valued at $602,636,000 after buying an additional 11,894,858 shares during the last quarter. Revenue is now expected to be down 1 percent to up 0.5 percent. The company has a debt-to-equity ratio of 1.04, a current ratio of 1.47 and a quick ratio of 0.45.

The company, which has corporate offices in Cincinnati and NY, also announced that it's ending its China e-commerce joint venture with Fung Retailing Ltd.

Macy's will continue to have a presence on Alibaba's Tmall, but the company said that its e-commerce team in San Francisco will run the China business.