- Prachi Singh |
Macy's, Inc’s earnings per diluted share of 0.45 dollar or 0.48 dollar excluding impairment and other costs compared to 0.26 dollar per share in the first quarter of 2017 for both reported and adjusted diluted earnings per share. Excluding asset sale gains, the company said, earnings per diluted share were 0.42 dollar in the first quarter of 2018 compared to 0.12 dollar per share in the first quarter of 2017.
"Macy's, Inc.'s results for the first quarter of 2018 reflect continuing momentum in the business. We exceeded our expectations and saw strong performance across all three brands--Macy's, Bloomingdale's, and Bluemercury--as well as across all geographic regions and families of business. We are maintaining a healthy inventory position, which helped us deliver improved gross margin," said Jeff Gennette, Macy's, Inc. Chairman and CEO in a statement.
First quarter net sales improve 3.6 percent
The company reported comparable sales on an owned basis that were up 3.9 percent in the first quarter compared to the first quarter of 2017. On an owned plus licensed basis, comparable sales were up 4.2 percent for the first quarter of 2018. Net sales totalled 5.541 billion dollars, an increase of 3.6 percent. The company estimates that comparable sales in the quarter benefited approximately 250 basis points from the shift of Friends and Family from the second quarter to the first. Excluding this, the company estimates that comparable sales were up 1.7 percent on an owned plus licensed basis.
Macy's, Inc.'s operating income for the quarter totalled 238 million dollars or 4.3 percent of sales, compared to 219 million dollars or 4.1 percent of sales, for the first quarter of 2017. Operating income totalled 257 million dollars or 4.6 percent of sales, excluding impairment and other costs of 19 million dollars, which primarily relate to the wind-down of Macy's China Limited.
Net income attributable to Macy's, Inc. shareholders for the first quarter totalled 139 million dollars or 2.5 percent of sales, compared to 78 million dollars or 1.5 percent of sales, for the first quarter of 2017. Net income was 149 million dollars or 2.7 percent of sales, excluding impairment and other costs compared to 80 million dollars or 1.5 percent of sales, in the first quarter of 2017, excluding premiums on the early retirement of debt. Also excluding asset sale gains, net income for the first quarter was 131 million dollars or 2.4 percent of sales, compared to 38 million dollars or 0.7 percent of sales, in the first quarter of 2017.
Macy’s raises earnings and sales guidance
Macy's is updating its guidance for fiscal 2018. The company now expects adjusted earnings per diluted share of 3.75 dollars to 3.95 dollars in fiscal 2018, excluding anticipated settlement charges related to the company's defined benefit plans as well as impairment and other costs. This reflects an increase of 20 cents compared to the prior guidance.
Total sales are expected to range from a 1 percent decline to a 0.5 percent increase in fiscal 2018. Comparable sales on an owned plus licensed basis are expected to increase between 1 and 2 percent. Comparable sales on an owned basis are expected to be 20-30 basis points below comparable sales on an owned plus licensed basis.
Macy’s also announced that it has come to a mutual agreement to end the joint venture with Fung Retailing Limited. Macy's will remain active on Alibaba's e-commerce platform TMall, as well as social media channels. The Macy's e-commerce team in San Francisco will manage the ongoing China business with operational support from Fung Omni in Shanghai.