Macy’s, Inc. released its latest earnings report before opening bell this morning, posting adjusted earnings of $2.09 per share, against the consensus of $1.89. Revenue also beat consensus, coming in at $8.87 billion against the expectation for $8.83 billion.
Macy’s exceeds full-year guidance
Reported earnings for the fourth quarter were $1.73 per share, excluding $1.77 million in expenses related to store closings and impairments.
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For the full year, Macy’s adjusted earnings came in at $3.77 per share, exceeding management’s latest guidance of between $3.54 and $3.59 looking at higher sales and lower expenses. Full-year comparable sales fell 2.5%, compared to the last guidance of a 2.7% decline in sales. Full-year owned stores saw a 3% decline in comparable sales. Total sales fell 3.7% for the full year to $27.1 billion.
Macy’s also provided an update on its real estate plans. It has started contacting possible interested parties in connection with forging a partnership or joint venture for the flagship and mall-based properties. The department store chain described early interest in a possible transaction as having a “high degree,” adding though that it’s “premature to comment further at this point.”
Macy’s issues solid guidance
Macy’s management expects comparable store sales to rise by about 1% this year, including comparable sales at owned stores at about 50 basis points lower than that. The department store chain expects total sales to fall by about 2% this year as a result of the 40 stores it closed last year. Management projects earnings of between $3.80 and $3.90 per share for the full year, compared to the consensus of $3.84 per share.
Management says 2016 is off to a strong start.
“While 2015 was challenging, our sales trend improved in January as the weather turned colder in northern climate zones and Macy’s and Bloomingdale’s were well-stocked in coats, boots, sweaters, gloves, hats and other seasonal goods,” Macy’s Chairman and CEO Terry Lundgren said in a statement. “As the year ended, our inventories were in good shape (up by 0.7 percent on a comp basis). We are encouraged by the way the business responded going into 2016, and we believe we are well positioned to stabilize sales levels this year as we lay the foundation for enhanced shareholder value and sustained, long-term profitable growth.”
Macy’s shares climbed by more than 5% to as high as $43.41 in premarket trading.