Macy’s Inc. (M) beat analyst expectations on sales and earnings numbers for the second quarter of 2018, despite sales seeing a slight decline from the prior-year period. The company also raised its earnings outlook for the full year of 2018. The stock, however, dropped 5% in premarket trade.
The retailer reported net sales of $5.57 billion for Q2 2018, down 1.1% from the same period last year. Comparable sales on an owned basis were flat – while, on an owned plus licensed basis, they were up 0.5%. Comp sales on an owned plus licensed basis beat market estimates.
Net income attributable to shareholders was $166 million or $0.53 per share compared to $111 million or $0.36 per share last year. Adjusted net income was $185 million or $0.59 per share.
Macy’s revised its guidance for full-year 2018. The company now expects adjusted diluted EPS to be $3.95 to $4.15. Total sales growth is expected to range from flat to a 0.7% increase. Comparable sales on an owned plus licensed basis are expected to increase between 2.1% to 2.5%. Comp sales on an owned basis are expected to be 20 basis points to 30 basis points below comp sales on an owned plus licensed basis.
Macy’s saw strength across all its operating divisions – Macy’s, Bloomingdale’s and Bluemercury. The company’s brick & mortar business along with its online business performed well during the quarter, helped by the strategic initiatives it has been undertaking over the past couple of months. Despite this, sales are still seeing pressure from shifts in consumer trends and Amazon’s strong e-commerce presence.