Retail Earnings Previews: Macy’s And J C Penney To Report This Week

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The first quarter earnings reporting period is downshifting as we move into retail in the second half of this week. Macy’s and J C Penney are set to release their next earnings reports on Thursday and Friday, respectively. Both releases are expected before opening bell on their respective days.

Macy’s earnings preview

Consensus estimates for Macy’s suggest earnings of 36 cents per share on $5.5 billion in sales. Gordon Haskett analyst Chuck Grom recently initiated coverage of Macy’s with a Hold rating and $29 price target. He’s expecting a 4% decline in same store sales. In the year-ago quarter Macy’s posted adjusted earnings of 40 cents per share on $5.77 billion in sales.

Although he feels that in general, the department store chain is making all the right strategic moves like closing stores and focusing on the digital aspect of its business, he describes the retail sector’s current headwinds as “scary.” He also warned that things could get even worse and notes that selling off assets and riding tailwinds of reduced costs support it forever.

For the full year, Macy’s expects earnings to be between $3.37 and $3.62 per share or $2.50 to $2.75 per share, excluding gains from asset sales. The department store chain also guided for a 2.2% to 3.3% decline in same store sales for the full year.

Shares of Macy’s rose by as much as 1.01% to $29.60 during regular trading hours.

J C Penney earnings preview

Consensus estimates suggest that J C Penney will report $2.78 billion in revenue and adjusted losses of 20 cents per share. In the year-ago quarter, the retail chain reported adjusted losses of 32 cents per share on $2.81 billion in sales. Consensus suggests a decline of 0.4% in comparable store sales for the quarter, although Credit Suisse analyst Christian Buss is forecasting a 0.6% decline.

He said in a recent note that J C Penney’s focus on national brands and “category optimization” encouraged him, and he expects these areas to help drive sales.

With its last earnings report in February, the department store chain offered full-year guidance for 2017 that was on the disappointing side: adjusted earnings of 40 cents to 65 cents per share, versus the 50 cents that consensus was looking for at that time. J C Penney also said at the time that it expects comparable store sales for the full year to be between down 1% and up 1%, which was a disappointment against the consensus of a 1.2% increase.

Shares of J C Penney ticked higher during regular trading hours on Wednesday, climbing by as much as 2.25% to $5.68.

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