Categories AlphaGraphs, Analysis, Retail

Macy’s set for Q4 earnings after a lackluster holiday season

Macy’s is set to report its fourth-quarter earnings results on Tuesday, February 26, on the heels of one of its worst holiday seasons. The stock had tumbled almost 18% on January 10, when the company posted weak holiday sales figures and slashed its outlook for FY18.

For the November/December period, comparable sales of Macy’s owned and licensed stores grew just 1.1%. Comp sales in the owned stores saw only a slight increase of 0.7%.

Image courtesy: Macy’s

The Cincinnati-based department store chain currently estimates FY18 sales to be flat compared to the earlier outlook of +0.3% to 0.7%. EPS outlook for the year was reduced to $3.95 to $4.00 from the prior guidance of $4.10 to $4.30. CEO Jeff Gennette had then said that the holiday season started off strong on the back of Black Friday and Cyber Week but then weakened by mid-December.

However, this weakness was spread across the retail industry, and rivals including Kohl’s (KSS), Target (TGT), JCPenney (JPC) and Dillard’s (DDS) also saw their stocks plunge.

For the fourth quarter, analysts expect Macy’s to report earnings of $2.65 per share on revenues of $8.46 billion. Both EPS and sales represent modest declines from the fourth quarter of 2017.

Macy's lowers FY18 outlook, reports holiday sales

With the company shelling out more money to improve its digital platform, margins are likely to be squeezed in Q4. The management had earlier warned of higher SG&A costs in the fourth quarter.

Separately, the company has been taking measures to optimize costs by shuttering stores that are not profitable in order to survive the tough battle against online retailers.

In Q3

Macy’s reported a 107% jump in earnings for the third quarter, helped by the combination of healthy brick & mortar stores, robust e-commerce, and a great mobile experience. The bottom line exceeded analysts’ expectations while the top line came in line with consensus estimates.

Macy’s Inc Q3 2018 Earnings Infographics

The stock has a 12-month average price target of $25, suggesting a 4% upside from the last close.

 

Follow our Google News edition to get the latest stock market, earnings, and financial news at your fingertips 

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top