Macy's shares jump as sales growth beats estimates

Macy's (M) Upgraded to Positive by OTR Global

Macy's Stock Soars After Crushing Q1 Earnings Forecasts, Lifting Views

The company reported $2.82 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.71 by $0.11. Royal Bank of Canada set a $26.00 target price on shares of Macy's and gave the company a "hold" rating in a report on Friday, January 19th. Vestpro Financial Partners Inc. dba CPF Texas purchased a new position in Macy's during the 4th quarter worth approximately $104,000. Kistler Tiffany Companies LLC raised its position in shares of Macy's by 31.3% during the fourth quarter. Analysts predicted, for instance, that sales at Macy's Inc. stores open more than a year, including its licensed stores, would rise about 1.4%.

The company said all three of its divisions - Macy's, Bloomingdale's and Bluemercury - exceeded expectations during the first quarter of fiscal 2018. "We are maintaining a healthy inventory position, which helped us deliver improved gross margin", said Jeff Gennette, Macy's, Inc. chairman and CEO. "Our best customer is responding well to the improvements we've made to her experience in our stores, and through the Macy's app." .

Gannette also stressed the importance of the company's turnaround effort called the "North Star" strategy and its revamped merchandising and marketing operations for the better-than-expected quarter. Overall US consumer spending remains strong, and Macy's also got a bump from increased tourist dollars.

The company is raising its profit guidance for fiscal 2018.

Macy's posted sales of $5.34 billion during the same quarter last year, which would indicate a positive year over year growth rate of 1.7%.

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The numbers are certainly welcome news for Macy's, which saw same-store sales decline for 12 straight quarters before the holiday season. Part of the jump can be attributed to the fact that Macy's shifted a friends and family promotional event to the first quarter from the second quarter this year. Apart From this, the company estimates that comparable sales were up 1.7 percent on an owned plus licensed basis. Operating income was $238 million as compared to $219 million in the period a year earlier.

Excluding impairment and other one-time costs, Macy's earned $0.48 per share, $0.11 higher compared with what analysts had anticipated. Federated Investors Inc. PA increased its stake in shares of Macy's by 3.5% during the first quarter.

Net cash offered by operating activities was $322 million in the first quarter of 2018, contrast to $237 million in the first quarter a year ago. Net cash used by financing activities in the first quarter of 2018 was $99 million, contrast with $273 million previous year. In recent weeks, the company acquired the retail concept Story, an acquisition that brought with it a much-talked-about innovator in founder Rachel Shechtman, and also announced it has broadened its loyalty program beyond credit card holders and expanded its off-price Backstage business. The company said it is ending a joint venture with China's Fung Retailing that began in 2015. "The winning formula for [Macy's] is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience".

The company said it now expects adjusted profit of $3.75 to $3.95 per share for the year, up from a prior forecast of $3.55 to $3.75.

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