Macy's Inc (M) Comps Fall More Than Expected Amid Mixed Q3 Earnings

Alicia Cross
November 10, 2017

Macy's also said its comparable sales - those at stores open at least a year, a key gauge of retail performance - fell 4% in the quarter that ended October 28 compared with a year earlier. Adjusted earnings per share (EPS) increased from $0.17 to $0.23, helped by gains in real estate, which beat estimates at $0.19. The retailer recorded a drop of 0.9 percent, compared to the decline of 0.2 percent expected by Thomson Reuters.

The Standard & Poor's 500 index fell 11 points or 0.5 percent to 2,582.

Macy's, which is now executing a broader digital transition, reported a steep revenue decline and a drop in same-store sales despite beating profit estimates.

"Overall, we're pleased with the results for the third quarter and we remain on track to meet our full-year sales and earnings guidance for 2017".

Macy's said its third-quarter profit, excluding the one-time charges, equaled 23 cents a share, up from 17 cents in the year-earlier quarter. "Importantly, we also saw better gross margin performance primarily due to our tightly controlled inventory position", said Macy's Inc.

Even so, Macy's Chief Executive Jeff Gennette said he was "excited about our plans" for the holiday season, in part because of a new loyalty awards program.

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In a Nutshell: Kohl's saw net income decline in the third quarter, as total sales were basically flat.

As for Macy's, the company actually said comparable sales fell 4% on an owned basis and 3.6% on a licensed one, but earnings were better than expected.

Total sales for the year are expected to be down between 3.2 percent and 4.3 percent. The company also reduced its guidance for profit during fiscal 2017 to a maximum of $2.95 a share, down from the previous top level of $3 a share.

Earnings: Net income in the quarter declined 20 percent to $117 million from $146 million a year ago. "Sales at Bloomingdale's were stronger than Macy's, particularly in the home category".

CORRECTION: Nordstrom reported $3.63 billion in revenue for the quarter. The high price target was $36 and the low was $20.

"At the same time, we're innovating with new smaller store concepts, rightsizing some of our stores with other retailers and piloting concepts like our initiative with Amazon", Mansell said. "We believe both of these tests have the potential to drive incremental traffic to our stores, which as you know is our number one priority".

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