Economy

Macy's Hasn't Seen Sales Grow in 3 Full Years

Shares in USA department store group Macy´s firmed in early trading today after the company beat third-quarter earnings forecasts.

Macy's posted steep sales declines on Thursday, but tighter inventory controls helped boost profit margins, allowing the retailer to outpace analysts' earnings expectations.

In response, Macy's has closed stores, tightly controlled inventory, built its Backstage discount business and monetised key real estate properties.

That helped its profit more than double in the quarter ended October 28 to $36 million from $17 million a year earlier.

Macy's Q3 2017 earnings results were released before opening bell this morning, and the department store operator reported adjusted earnings of 23 cents per share on $5.28 billion in revenue.

Comparable sales (comps) on an owned basis were down 4.0% in the third quarter, and down 3.6% on an owned plus licensed basis.

Net sales for the quarter declined 6.1 percent to $5.28 billion from $5.63 billion in the year-ago period and missed analysts' consensus estimate of $5.31 billion.

Revenues fell 6.1% from previous year to $5.28 billion, missing analysts' view for $5.31 billion, however. The average analyst estimate was $5.31 billion. Cost of sales declined to $3.18 billion from $3.39 billion. And online sales rose by a double-digit percentage for the 33rd straight quarter, easing the pain of in-store sales declines and store closings.

"A highlight of the third quarter was the launch of the new Star Rewards loyalty program - our best customers are responding positively", Gennette said on Thuesday. On an owned plus licensed basis, Macy's still expects comparable store sales to fall by 2% to 3%. As previously announced in August, the company expects a $0.01 increase in adjusted earnings per share due to the restructuring of its merchandising operations.

Excluding the impact of the anticipated fourth-quarter gain on the sale of the Union Square Men's building in San Francisco and the anticipated settlement charges, adjusted earnings per share of $2.91 to $3.16 are expected in 2017.



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