Macy's Lowers Full-Year Profit Outlook; Shares Fall
August 14 2019 - 9:08AM
Dow Jones News
By Aisha Al-Muslim
Macy's Inc. lowered its full-year earnings outlook after missing
profit expectations in the latest quarter, even though the retailer
reported growth in a key sales metric.
For the current fiscal year, Macy's lowered its earnings
guidance by 20 cents. Excluding settlement charges, impairment and
other costs, the company now forecasts adjusted earnings per share
of $2.85 to $3.05 for the year, compared with its previous estimate
of $3.05 to $3.25.
The stock fell 12.5% to $16.94 in premarket trading Wednesday.
Shares are down about 54% in the last 12 months.
Despite the expected fall in profit, Macy's reaffirmed its
annual sales guidance. The company still expects net sales to be
roughly flat from the last fiscal year, with comparable sales to be
flat to up 1%.
Sales at stores open at least a year grew 0.2% for the period
ended Aug. 3, above the FactSet estimate of flat sales. Including
licensed departments, same-store sales rose 0.3%.
Overall, the Cincinnati-based company Wednesday reported net
sales for the second quarter fell 0.5% to $5.55 billion, in-line
with the consensus forecast.
"We had a slow start to the quarter and finished below our
expectations, " Chief Executive Jeff Gennette said in prepared
remarks. "Rising inventory levels became a challenge based on a
combination of factors: a fashion miss in our key women's
sportswear private brands, slow sell-through of warm-weather
apparel and the accelerated decline in international tourism."
The department store operator posted a profit of $86 million, or
28 cents a share, down from $166 million, or 53 cents a share, a
year earlier.
Excluding impairment and other costs, adjusted earnings were
also 28 cents a share, below the 46 cents a share analysts polled
by FactSet were looking for.
On Tuesday, the Trump administration abruptly suspended plans to
impose new tariffs on about $156 billion in goods from China until
Dec. 15 on items including toys, cellphones and laptop computers
that had been set to take effect Sept. 1.
The tariff delay comes as companies expressed concerns about the
impact an escalating trade fight would have on businesses and
consumers ahead of the holiday shopping season. Retailers' profit
margins have already been under pressure as they spend on upgrading
their digital capabilities and remodeling their stores.
Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com
(END) Dow Jones Newswires
August 14, 2019 08:53 ET (12:53 GMT)
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