Macy’s Earnings Do Not Rise to the Challenge

In its outlook statement, Macy’s said that it continues to expect same-store sales growth in the range of 2.5% to 4% in the second half of the year and a full-year rise of 2% to 2.9%. At the end of the first quarter, the retailer forecast a same-store sales increase of 3.5% for the 2013 fiscal year.

Macy’s also lowered its outlook for 2013 EPS from a range of $3.90 to $3.95 to a new range of $3.80 to $3.90. The consensus full-year estimates called for EPS of $3.94 on revenues of $28.33 billion.

The company’s CEO said:

We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event. Even so, second quarter sales performance was softer than anticipated, and we are disappointed with the results. Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment. After a cool spring, we have taken appropriate markdowns and customers are responding favorably.

Same-store sales fell 0.8%, compared with the second quarter of 2012, but rose 1.5% for the first six months of the fiscal year.

Shares are down about 3.4% in premarket trading this morning, at $46.84 in a 52-week range of $36.30 to $50.77. Thomson Reuters had a consensus analyst price target of around $53.60 before today’s results were announced.