Is Macy’s Guidance Enough?

For the 2015 fiscal year, Macy’s reported $4.40 in EPS on revenue of $28.11 billion. The consensus estimates called for EPS of $4.36 on $28.14 billion in revenue.

In the 2014 fiscal year, Macy’s expects comparable sales growth of approximately 2% and total sales growth of 1%. The company also expects EPS in a range of $4.70 to $4.80, compared to the consensus estimate for the 2015 fiscal year of $4.84.

Net cash provided by operating activities was $2.71 billion in fiscal 2014, down from $2.55 billion in fiscal 2013. The company repurchased approximately 31.9 million shares of its common stock for $1.9 billion in the 2014 fiscal year. At the end of January 2015, the company had remaining authorization to repurchase up to approximately $1.0 billion of its common stock.

Sales for the fourth quarter were up 1.8% to $9.36 billion from the same period in 2013. Comparable sales growth for the fourth quarter was 2.5%.

In the 2014 fiscal year, Macy’s opened five stores and closed 22 stores. For the coming year, the company expects to open a new Macy’s store in Ponce, Puerto Rico, and a Bloomingdale’s in Honolulu. For the 2016 fiscal year, a new Macy’s store has been announced for opening in Kapolei, Hawaii, along with a replacement Macy’s store in Los Angeles.

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Terry J. Lundgren, chairman and chief executive of Macy’s, said:

We are very excited about our upcoming acquisition of Bluemercury, Inc., widely recognized as America’s largest and fastest-growing luxury beauty products and spa retailer. We continue to expect to complete the Bluemercury transaction in the first quarter, with an initial focus on accelerating the growth of its base of self-standing specialty stores in urban and suburban markets, as well as on accelerated omnichannel growth and offering Bluemercury products in Macy’s stores. This represents a new channel and access to new customers for our company.

Shares of Macy’s were down about 1% at $63.53 Tuesday morning. The stock has a consensus analyst price target of $67.61 and a 52-week trading range of $53.33 to $68.30.