Macy’s Q1 earnings down to 23 cents, sales drop 7.5 percent

Macy's first quarter 2017 earnings stood at 23 cents per diluted share or 24 cents per diluted share excluding premiums and fees associated with debt repurchases. This compares with 37 cents per diluted share, or 40 cents per diluted share excluding non-cash settlement charges related to the company's retirement plans, in the first quarter of 2016.

"Our first quarter sales and earnings results were consistent with our expectations, and we remain on track to meet our 2017 guidance. We are encouraged by the performance of the pilot programs we tested last year in categories like women's shoes, fine jewelry, and furniture and mattresses," said Jeff Gennette, President and CEO of Macy's in a media release.

First quarter sales down 7.5 percent

Sales in the first quarter totaled 5.338 billion dollars, a decrease of 7.5 percent, compared with sales of 5.771 billion dollars in the same period last year. The company said, year-over-year decline in total sales reflects, in part, the store closings announced in 2016. Comparable sales on an owned basis were down 5.2 percent and down 4.6 percent on an owned plus licensed basis.

Macy's operating income totaled 220 million dollars or 4.1 percent of sales for the quarter compared to 276 million dollars or 4.8 percent of sales for the same period in 2016. The 276 million dollars in the first quarter included non-cash settlement charges of 13 million dollars (9 million dollars after tax, or 3 cents per diluted share) related to the company's retirement plans.

The company’s board of directors declared a regular quarterly dividend of 37.75 cents per share on Macy's common stock, payable July 3, 2017, to shareholders of record at the close of business on June 15, 2017.

Macy’s continues store realignment program

In the first quarter, the company received cash proceeds off 47 million dollars were related to the sale of the company's Downtown Minneapolis property. Macy's is also under contract to sell two additional floors of its Downtown Seattle store after having sold floors five through eight in 2015. This transaction is expected to close in fall 2017.

In the first quarter, the company opened new Macy's stores in Murray, UT, and Los Angeles, as well as 10 new freestanding Bluemercury beauty specialty stores and 11 new Macy's Backstage stores within existing Macy's stores. Additionally, one Bloomingdale's store opened in Kuwait under a license agreement with Al Tayer Group. Subsequent to the end of the first quarter, the company announced the sale and intended closure of the Macy's store at Temple Mall in Temple, TX.

For the full year, the company expects comparable sales on an owned basis to decline between 2.2 percent and 3.3 percent, with comparable sales on an owned plus licensed basis to decline between 2 percent and 3 percent. Total sales are expected to be down between 3.2 percent and 4.3 percent in fiscal 2017.

Adjusted diluted earnings per share of between 3.37 dollars and 3.62 dollars are expected in 2017, excluding the impact of the anticipated settlement charges related to the company's defined benefit plans and premiums and fees associated with debt repurchases. Excluding the impact of the anticipated fourth quarter gain on the sale of the Union Square Men's building in San Francisco, the anticipated settlement charges related to the company's defined benefit plans and premiums and fees associated with debt repurchases, adjusted diluted earnings per share of 2.90 dollars to 3.15 dollars are expected by the company in 2017.

Picture:Facebook/Macy's