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Home / Business / Macy & # 39; s raises the full-year outlook for turnaround plans

Macy & # 39; s raises the full-year outlook for turnaround plans



After a strong Christmas season, Macy benefits from healthy consumer spending.

  • Earnings per share: 48 cents, adjusted, 37 cents expected
  • Sales: 5 , $ 5 billion expected over $ 5.4 billion
  • same-store sales: an increase of 4.2 percent compared to an increase of 1
    .4 percent expected

The company said all three divisions – Macy & # 39 ; s, Bloomingdale & # 39; s and Bluemercury – exceeded expectations in the first quarter of fiscal 2018.

The company also saw a boost from international tourism, but said that it would end its joint venture with Fung Retailing Limited in China would. Instead, Macys will stay on Alibaba's TMall platform and focus on it. The overseas retailer's top markets include China, the United Kingdom and Brazil.

"After a good holiday season, there was a question as to whether Macy's could continue to bring recovery," said Neil Saunders of GlobalData Retail. "Today's results confirm this … suggesting that Macy's recovery is gaining momentum."

Net income climbed to $ 139 million, or 45 cents per share, from $ 78 million, or 26 cents per share, a year ago in the period ended May 5. Excluding disposable income, Macy's earned 48 cents a share, 11 cents better than analysts expected.

Sales increased 3.6 percent to $ 5.5 billion, again exceeding analyst expectations. The company said some of its best-selling categories were fine jewelry and clothing.

Same-store royalty-based revenue grew 4.2 percent, nearly 3 percentage points higher than Street's forecast. Part of the jump can be attributed to the fact that Macy's has postponed a promotional event for friends and family to the first quarter since the second quarter of this year.

The retailer now expects full-year earnings per share to fall within a range of $ 3.75 to $ 3.95, 20 cents higher than a previous forecast. According to a Thomson Reuters survey, analysts demanded earnings of $ 3.61 per share.

Total sales in 2018 are predicted by Macy's to go up to half a percent. Same-store sales on a proprietary and licensed basis could increase by as much as 2 percent.

Just last week, Morgan Stanley downgraded Macy's stock, pointing to declining sales and profit "pressure" from online players for the rating change. A few days earlier, Deutsche Bank published a new note stating that investors in the department store sector have "limited upside potential."

But Macy's results on Wednesday paint a better-than-expected picture, and the company said the momentum will continue in the second half of the year. Online sales in the first quarter alone grew in the double-digit percentage range.

Yet, many retailers, including Macy's, are at risk of Amazon becoming the # 1 apparel retailer in the US by the end of 2018.

To combat rivals, the department store chain has focused on introducing new concepts in stores, such as: In branded pop-up stores, and on the expansion of the off-price business, Macy's Backstage. In the first quarter alone, Macy's has opened around 20 backstage locations, with 100 planned to open in the current fiscal year.

Macy's recently announced the acquisition of Story, a New York concept store, and becomes Story's Founder, Rachel Shechtman, as the "Brand Experience Officer" for the creative strategy win the company.

Last week, Macy's opened its loyalty program to all customers previously restricted to the chain's credit card holders. It allows shoppers to earn points on purchases that can be redeemed in Macy's stores or online.

The company is also in the process of bringing mobile checkouts to all locations by the end of the year, offering some stores a virtual reality shopping experience.

"Our best customer responds well to the improvements we've made in our stores, on .com, and on Macy's app," said CEO Jeff Gennette in a statement Wednesday ,

Macy's positive results set the tone for a number of other retailers, including JC Penney, Kohl and Nordstrom, who will report revenue in the coming days. Inventories of these retailers rose on Wednesday following the report.

With Wednesday's gains, Macy's shares rose 25 percent this year.

– CNBC's Courtney Reagan contributed to this coverage.


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