Macy’s Inc. (NYSE: M) reported second-quarter 2017 results before markets opened Thursday. The department store giant posted adjusted diluted earnings per share (EPS) of $0.48 on revenues of $5.55 billion. In the same period a year ago, Macy’s reported EPS of $0.54 on revenues of $5.87 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.46 and $5.52 billion in revenue.
Comparable store sales for owned plus licensed stores fell 2.5% in the quarter, and they fell 2.8% on the company’s owned stores. Net sales fell 5.4% year over year, due in part to store closures.
Operating income as reported totaled $254 million, representing a margin of 4.6%, compared to operating income of $117 million or 2% of sales in the year-ago quarter. Second-quarter operating income includes $43 million in book gains related to the sale of real estate, up from $21 million in the second quarter of 2016.
Macy’s reaffirmed its full-year same-store sales guidance calling for a decline of 2% to 3% on an owned plus licensed basis, with same-store sales at owned stores down 2.2% to 3.3%. Total sales are expected to be down between 3.2% and 4.3% year over year. Adjusted EPS guidance falls in a range of $2.90 to $3.15, excluding items including a gain on the sale of its San Francisco property.
Consensus estimates call for third-quarter EPS of $0.15 on revenues of $5.32 billion. For the full year, analysts were looking for EPS of $3.29 on sales of $24.67 billion.
Improved margins based on fewer stores is a tactic that can only work for so long. Investors will be disappointed in the company’s EPS guidance and that will cost the stock in today’s trading.
CEO Jeff Gennette said:
We are excited about plans for fall, including the launch of a new loyalty program and the new marketing strategy, which we anticipate will further improve our sales trend in the back half of the year. We are working with a mindset of continuous improvement and will adapt our business in order to reach our goal of stabilizing the brick-and-mortar business while investing for accelerated growth in digital and mobile. Key to this strategy is engaging our customers with an improved experience that includes more elevated and exclusive assortments, a better integration of technology both online and in the store, and additional enhancements intended to drive traffic and sales.
Shares traded down about 2% in Thursday’s premarket session, at $23.03 in a 52-week range of $20.85 to $45.41. The 12-month consensus price target on the stock was $26.06 before results were announced. The high price target was $36.00.
24/7 Wall St.Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
