Latest
Recommended
Published: Wed, February 22, 2017
Economy | By Melissa Porter

Surprise! Macy's Reports Earnings Beat as it Reportedly Mulls Takeover Offer


Sales slipped 4% to $8.52. billion.

The owner of the Macy's and Bloomingdale's chains said net income attributable to its shareholders fell to $475 million, or $1.54 per share, in the fourth quarter ended January 28, from $544 million, or $1.73 per share, a year earlier.

Shares of Macy's Inc (NYSE: M) rose about 3 percent as investors preferred to overlook the sales shortfall and rather focus on the EPS beat, driven by store closures and lower costs.

Sales in Macy's stores open at least a year, including sales in departments licensed to third parties, fell 2.1 percent, compared with the 2.2 percent drop analysts polled by research firm Consensus Metrix had expected.

For the 2017 fiscal year, Macy's projected comparable sales to fall between 2% and 3%. And with revenue falling 4% year over year and missing estimates by about $100 million, the Cincinnati-based department store operator, which forecasts another year of declining sales, still has plenty of deficits it needs to address. These include continued improvement in our digital platforms, the rollout of our new approach to fine jewelry and women's shoes, an increase in exclusive merchandise and the refinement of our clearance and off-price strategy. Adjusted diluted EPS are expected to land between $3.37 and $3.62 while adjusted diluted EPS are predicted in the range of $2.90 to $3.15.

"You've heard and talked about the rumors of somebody buying us, and you've probably also heard we're buying them", Lundgren said. "The combination of these initiatives will help us gain market share, return to growth and drive enhanced value for our shareholders over time". "Looking at the continued challenges in the retail environment and changing consumer shopping behaviors, we know we must evolve our strategy and execute faster", Lundgren said.

"2016 was not the year we expected", Chief Executive Terry Lundgren said Tuesday.

Macy's has been trying to generate revenue from its sprawling physical footprint and said it generated $675 million in cash a year ago from its real estate transactions.

Macy's also plans on advancing its Brookfield partnership and "continuing to monetize locations that have closed or are plan to close", Lundgren added.

Like this: