Macy's Q1 sales are up

Daniel Fowler
May 16, 2018

During the same period in the previous year, the business earned $2.02 earnings per share. analysts expect that Macy's Inc. will post 3.63 EPS for the current fiscal year.

Excluding special items, the company announced Non-GAAP net income of $ 149.00 million or 48 cents per share.

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%. The company reported $2.82 earnings per share for the quarter, beating the consensus estimate of $2.71 by $0.11.

Macy's Chairman and CEO Jeff Gennette said in a statement Wednesday that the retailer performed well across all three of its nameplates: Macy's, Bloomingdale's and Bluemercury. American International Group Inc. raised its position in shares of Macy's by 98.9% in the fourth quarter. Following the sale, the director now directly owns 16,184 shares of the company's stock, valued at approximately $473,382. Same-store sales climbed 4.2%, almost 3% points higher than analysts' prediction.

Macy's said a stellar performance at its businesses helped push quarterly same-store sales and profit well above Wall Street estimates, signaling the company was keeping up in a fiercely competitive retail landscape. There were no impairment and other costs in the first quarter of 2017. In the same period of a year ago, the retailer said it had EPS of $0.24 and $5.34 billion in revenue.

Total sales in 2018 are predicted by Macy's to climb as much as half a percent. Its online sales increased by a double-digit percentage during the first quarter alone.

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Net cash offered by operating activities was $322 million in the first quarter of 2018, contrast to $237 million in the first quarter a year ago. Net cash used by financing activities in the first quarter of 2018 was $99 million, contrast with $273 million past year.

To combat rivals, the department store chain has been focused on rolling out new concepts in stores, like branded pop-up shops, and expanding its off-price business, Macy's Backstage. "The winning formula for [Macy's] is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience". Macy's will remain active on Alibaba's e-commerce platform TMall, in addition to social media channels.

Including Wednesday's gains, Macy's shares are up about 25 percent so far this year.

The company now expects adjusted earnings per diluted share of $3.75 to $3.95 in fiscal 2018.

As the recently-floundering retailer keeps raising its outlook, though, it also risks creating expectations it can't meet. Sales are expected to range from a 1% decline to a 0.5% increase from $24.8 billion past year compared to the prior call for a decline of 0.5% to 2%. Analysts only expected that same store sales would rise by 1.4%.

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