Department store chain Macy’s (NYSE: M) Tuesday said its fourth-quarter sales decreased modestly. As a result, earnings dropped but surpassed the estimates, reflecting the better-than-expected holiday sales. The stock gained during the pre-market session, following the announcement, but pulled back later.
Sales Edge Down
At $8.3 billion, January-quarter net sales were down 1% from last year. The top-line came in slightly above the consensus estimates. Comparable store sales dropped by 0.6%.
Also see: Macy’s Q3 2019 Earnings Conference Call Transcript
Adjusted earnings declined to $2.12 per share from $2.73 per share in the fourth quarter of 2018. Analysts were looking for a smaller number. Net income was $340 million or $1.09 per share, compared to $740 million or $2.37 per share in the year-ago quarter.
“Together with disciplined expense management, our solid sales results in the fourth quarter allowed us to deliver stronger-than-expected earnings results. Importantly, we exited the year with a clean inventory position,” said CEO Jeff Gennette.
Guidance
The retailer also reiterated its 2020 guidance and continues to expect net sales to be in the range of $23.6 billion to $23.9 billion. Full-year comparable store sales, on an owned-plus-licensed basis, are expected to decline between 2.5% and 1.5%. The earnings per share forecast, on an adjusted basis, has been reaffirmed in the $2.45-$2.65 range.
Growth Strategy
The management is implementing a growth strategy aimed at stabilizing profitability and achieving sustainable growth in the long term. The latest initiative in that direction was the Polaris strategy announced earlier this month, which will focus on strengthening customer relationships, accelerating digital growth and optimizing the store portfolio.
Last month, the company reported a 0.6% decline in same-store sales for November and December, which was slightly better than the estimated outcome. It has been innovating the business with a view of bringing back customers to the stores, as traffic continues to drop due to the prevalence of e-commerce.
Related: Walmart Q4 profit misses estimates
Shares of Macy’s slipped to a ten-year low this week, continuing the downtrend that started several months ago. The stock has lost 7% since the beginning of the year.