Macy’s Tops Earnings Estimates, Raises Forecast
Macy's eported quarterly earnings that surpassed analysts' expectations and raised its full-year profit outlook on Wednesday, despite powerful storm Sandy disrupting the lives of shoppers and sales associates in northeastern and mid-Atlantic states.
After the earnings announcement, the department store retailer's shares initially rose but later turned negative in pre-market trading. (Click here to get the latest quotes for Macy's.)
Macy's reported that its net income rose 4.3 percent to $145 million, or 36 cents a share, from $139 million, or 32 cents a share, a year earlier.
Macy's revenue ncreased 4 percent to $6.08 billion rom $5.85 billion a year ago.
Sales at stores open at least a year, a key industry metric known as same-store sales, rose 3.7 percent.
Analysts expected the company to report earnings excluding items of 29 cents a share on $6.08 billion in revenue, according to a consensus estimate from Thomson Reuters.
For the holiday quarter, when Macy's estimates same-store sales will rise 4.2 percent, Macy's expects to earn $1.94 to $1.99 a share. This range fell short of analysts' estimates of $2.04 a share.
Macy's also increased its full-year 2012 guidance range by 5 cents to $3.35 to $3.40 per diluted share. According to Thomson Reuters, analysts were expecting Macy's to earn $3.40 a share for the year.
Nearly one quarter of Macy's stores suffered a disruption last week when super storm Sandy hit. Macy's said last week, when it reported October sales, that it expected to make up any lost business.
On Wednesday, Macy's Chief Executive Terry Lundgren said he was confident about sales and profit growth in the holiday quarter, despite the storm.
The earnings release follows the company's announcement on Monday that its store locations will open at midnight on Black Friday, the day after Thanksgiving and a crucial shopping day for retailers.
Macy's also announced that, as of next year, it will stop reporting monthly sales, joining Kohl's, Saks, and J.C. Penney among department store chains that have decided this year to abandon the practice.
The company has been investing in the opening of distribution centers to fuel its online growth and investing in technology to make it easier to use mobile devices to shop inside stores. It is also in the early stages of a $400 million renovation of its Manhattan flagship.