Categories AlphaGraphs, Analysis, Retail

Macy’s set for Q4 earnings after a lackluster holiday season

Macy’s is set to report its fourth-quarter earnings results on Tuesday, February 26, on the heels of one of its worst holiday seasons. The stock had tumbled almost 18% on January 10, when the company posted weak holiday sales figures and slashed its outlook for FY18.

For the November/December period, comparable sales of Macy’s owned and licensed stores grew just 1.1%. Comp sales in the owned stores saw only a slight increase of 0.7%.

Image courtesy: Macy’s

The Cincinnati-based department store chain currently estimates FY18 sales to be flat compared to the earlier outlook of +0.3% to 0.7%. EPS outlook for the year was reduced to $3.95 to $4.00 from the prior guidance of $4.10 to $4.30. CEO Jeff Gennette had then said that the holiday season started off strong on the back of Black Friday and Cyber Week but then weakened by mid-December.

However, this weakness was spread across the retail industry, and rivals including Kohl’s (KSS), Target (TGT), JCPenney (JPC) and Dillard’s (DDS) also saw their stocks plunge.

For the fourth quarter, analysts expect Macy’s to report earnings of $2.65 per share on revenues of $8.46 billion. Both EPS and sales represent modest declines from the fourth quarter of 2017.

Macy's lowers FY18 outlook, reports holiday sales

With the company shelling out more money to improve its digital platform, margins are likely to be squeezed in Q4. The management had earlier warned of higher SG&A costs in the fourth quarter.

Separately, the company has been taking measures to optimize costs by shuttering stores that are not profitable in order to survive the tough battle against online retailers.

In Q3

Macy’s reported a 107% jump in earnings for the third quarter, helped by the combination of healthy brick & mortar stores, robust e-commerce, and a great mobile experience. The bottom line exceeded analysts’ expectations while the top line came in line with consensus estimates.

Macy’s Inc Q3 2018 Earnings Infographics

The stock has a 12-month average price target of $25, suggesting a 4% upside from the last close.


Follow our Google News edition to get the latest stock market, earnings, and financial news at your fingertips 

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment

Viewing Highlight