On a comparable store basis, third-quarter sales slipped 0.7%, but rose 0.8% for the first nine-months of the fiscal year. Macy’s reported a total sales decline of 1.3% year-over-year in the third quarter. Comparable store sales include comparable sales of departments licensed to third parties.
The company lowered its full-year 2014 EPS guidance from a prior range of $4.40 to $4.50 to a new range of $4.25 to $4.35. Full-year comparable store sales guidance was also lowered from a previous range of 2.0% to 2.5% growth to a new range of 1.2% to 1.5%. For the fourth quarter, comparable store sales are expected to rise 2% to 3%.
The company’s CEO said:
We are very pleased with our third quarter earnings, even though the sales performance fell short of our expectations. On a two-year basis, our third quarter sales trend was essentially unchanged from the first half of 2014. We knew we were up against very strong third quarter sales growth for our company last year, and thus we had anticipated that our year-over-year comparison would be lower in the third quarter than in the fourth quarter. Even so, sales did not live up to our expectations in the quarter. However, we were able to maintain gross margin flat to last year and reduced SG&A expense, even excluding the timing benefit of some items, including the sale of certain assets. All in all, it was a solid quarter for earnings.
Investors appear to be reacting to the solid beat on EPS more than to the big miss on revenues and the lowered guidance. CEO Terry Lundgren said he is optimistic about the fourth quarter based on an improved mix of merchandise both for holiday and post-holiday vacation sales. The company has also enhanced its marketing strategies to include same day delivery and other options in some markets. Finally, he doesn’t think the weather will be as harsh as last year’s heavy snow and bitter cold.
Shares were up about 2% in early trading Wednesday, at $59.64 in a 52-week range of $49.19 to $63.10. Thomson Reuters had a consensus analyst price target of around $64.50 before the results were announced.
Top Gaining Stocks
Top Losing Stocks