Macy's Reports Strong Sales Growth, Raises Guidance-Update
November 14 2018 - 11:52AM
Dow Jones News
By Suzanne Kapner
Macy's Inc. delivered healthy sales growth in its latest quarter
and raised its guidance for the year, positioning the retailer for
a strong holiday shopping season.
Same-stores sales grew 3.1% in the three months to Nov. 3.
Including licensed departments the figure increased 3.3%.
Total sales grew 2.3% to $5.4 billion. Net income more than
doubled to $62 million from $30 million a year earlier, helped by
asset sales, higher credit income and lower taxes.
Macy's shares fell 2.4% to $34.95 in morning trading. The stock
had climbed 75% over the past year.
Macy's Chief Executive Jeff Gennette told analysts on a
conference call that the company was seeing improved results in its
brick-and-mortar stores as well as e-commerce, which increased
sales by double-digits compared with a year ago.
He said he felt confident heading into the important year-end
quarter because consumer confidence and spending remained high, and
many of Macy's strategic initiatives are starting to pay off.
The company has been investing in a group of stores it calls
magnets, adding new lighting, fixtures, a better assortment of
merchandising and technological innovations, while embarking on an
experiment to shrink other less-promising locations.
Mr. Gennette said sales at the 50 magnet stores that have been
renovated so far this year are running ahead of the company average
and in some cases, sales in those stores have returned to positive
territory after several years of declines.
Macy's is also getting a lift from adding its Backstage discount
concept to existing department stores and rolling out new ways for
consumers to shop, including allowing them to buy online and pick
up items in stores. Mr. Gennette says shoppers tend to spend an
additional 25% when they pick up their online orders in a
store.
Two-thirds of Macy's customers rated their shopping experience
as good or very good, up from 59% a year ago, according to research
firm GlobalData Retail.
"Our data also show that for the first time in over eight years,
the number of people saying they will visit Macy's to do holiday
shopping has risen," Neil Saunders, a GlobalData managing director
said.
Analysts warned that despite the progress in the current
quarter, Macy's faces a tough sales comparison in the current
quarter given that same-store sales in the year-ago period
increased 1.3%.
Macy's raised its sales and earnings guidance for the year. It
now expects sales to increase by as much as 0.3%, up from a
previous of range of down 0.7% to flat. Earnings per share are now
expected to be in the range of $4.10 to $4.30 versus previous
guidance of $3.95 to $4.15.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
November 14, 2018 11:37 ET (16:37 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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