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Macy's Q3 sales drop, earning rise

By Prachi Singh

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Macy's reported third quarter earnings per diluted share of 12 cents, or 23 cents per share excluding restructuring and other costs and non-cash retirement plan settlement charges. This compares with 5 cents per share in the third quarter of 2016, or 17 cents excluding non-cash retirement plan settlement charges.

"Overall, we're pleased with the results for the third quarter and we remain on track to meet our full-year sales and earnings guidance for 2017. Importantly, we also saw better gross margin performance primarily due to our tightly controlled inventory position. We also saw continued double-digit growth in digital and are encouraged by the potential of Backstage in Macy's stores," said Jeff Gennette, Macy's CEO in a statement.

Sales in the third quarter were 5.281 billion dollars, a decrease of 6.1 percent, compared with sales of 5.626 billion dollars in the third quarter of 2016. The year-over-year decline in total sales reflects, Macy’s said, in part, the closure of stores previously announced by the company. Comparable sales on an owned basis were down 4 percent in the quarter and down 3.6 percent on an owned plus licensed basis.

Operating income totalled 121 million dollars or 2.3 percent of sales, compared to 107 million dollars or 1.9 percent of sales, for the third quarter of 2016. Operating income was 176 million dollars or 3.3 percent of sales, excluding restructuring and other costs of 33 million dollars and non-cash retirement plan settlement charges of 22 million dollars.

In the third quarter, the company opened eight new freestanding Bluemercury beauty specialty stores for a total of 135 stores and seven new Macy's Backstage off-price stores within existing Macy's stores for a total of 45 locations. During the quarter, the company announced that it will close the following stores in early 2018: Laguna Hills Mall in Laguna Hills, CA; Stonestown Galleria in San Francisco, CA; and Westside Pavilion in Los Angeles, CA.

Macy’s reaffirms FY17 outlook

Macy's 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 2.0 percent and 3.0 percent. Total sales are expected to be down between 3.2 percent and 4.3 percent in fiscal 2017. As previously announced in August, the company expects a 1cent increase in adjusted earnings per diluted share due to the restructuring of the merchandising operations and expects adjusted earnings per diluted share of between 3.38 dollars and 3.63 dollars in 2017.

Picture:Facebook/Macy's

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