Published: Wed, May 16, 2018
Markets | By Otis Pena

Macy's: Fiscal 1Q Earnings Snapshot

Macy's: Fiscal 1Q Earnings Snapshot

Macy's (NYSE:M) issued its earnings results on Wednesday. The institutional investor owned 10,551 shares of the company's stock after selling 2,867 shares during the quarter. During the same quarter a year ago, the business posted $0.24 earnings per share. (NYSE:M) in the first quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm's quarterly revenue was up 1.8% compared to the same quarter past year.

Shares of Macy's Inc.

"We exceeded our expectations and saw strong performance across all three well as across all geographic regions", Chief Executive Officer Jeff Gennette said.

On the call, Gennette attributed some of the gains to a 10 percent uptick in global tourism spending, along with what he called "a very healthy inventory position", indicating that the retailer has made better merchandising decisions and relied less on discounting to sell through product.

He added that the retailer had double-digit growth in its digital business in Q1 and that "our best customer is responding well to the improvements" made in Macy's stores and digital platforms.

Gennette, who took over for longtime Macy's CEO Terry Lundgren in March 2017, added that consumer spending remained "healthy" and that there were "significant improvements in worldwide tourism".

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Same Store Sales - Perhaps the most impressive line on the report had to do with same store sales. On the same-store sales front, Macy's crushed expectations with a 4.2 percent increase, well ahead of the expected 1.4 percent. Apart From this, the company estimates that comparable sales were up 1.7 percent on an owned plus licensed basis.

In other news, Director Deirdre P. Connelly sold 9,092 shares of Macy's stock in a transaction on Thursday, March 8th. Finally, Doyle Wealth Management raised its position in Macy's by 8.9% during the first quarter. The company reported $2.82 EPS for the quarter, topping the consensus estimate of $2.71 by $0.11. Net operating cash flow jumped 36% to $322 million. Net cash used by financing activities in the first quarter of 2018 was $99 million, contrast with $273 million a year ago.

On the corporate news front, Macy's revealed that it has come up with a new approach to handle its business in China.

During the presentation of the results, the department store retailer also announced it will end its joint venture with Chinese Fung Retailing Ltd.

The company also saw a boost from global tourism but said it would be ending its joint venture with Fung Retailing Limited in China. The winning formula for Macy's, a healthy brick & mortar business, robust e-commerce and a great mobile experience. Macy's updated its FY19 guidance to $3.75-3.95 EPS. The company now anticipates adjusted earnings per diluted share of $3.75 to $3.95 in fiscal 2018, apart from anticipated settlement charges related to the company's defined benefit plans in addition to impairment and other costs. This is a 20-cents increase over its previous outlook. The department-store chain now expects annual sales to be in a range of down 1% to up 0.5% from its prior forecast of sales falling between 0.5% and 2%.

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