Macy’s Inc. is off to a solid start.
The department store chain posted first-quarter earnings of 44 cents per share — down 8.3% from the same time last year but 11 cents ahead of Wall Street’s consensus bets. Its net income for the quarter ended May 4 was $136 million, compared with $139 million the prior year period.
Ahead of Wednesday’s opening bell, shares for Macy’s shot up more than 7%. As of 9:35 a.m. ET, the company’s stock was in the green 1.28% to $22.08.
The Cincinnati-based retail giant also reported revenues of $5.504 billion — just shy of the $5.505 billion forecasted by analysts — and found same-store sales rising 0.7%, versus an expected decline of 0.2%. It marked Macy’s sixth straight quarter of comparable sales growth, which the company has attributed to its turnaround strategy taking hold.
“As an omnichannel retailer, we are focused on growing our customer base by providing a great experience across all channels and taking market share category by category,” said chairman and CEO Jeff Gennette. “Our brick-and-mortar sales trend improved sequentially in the first quarter, supported by the Growth50 stores and Backstage.”
Outlined last February, the Growth50 project was Macy’s’ experiment to revamp 50 stores across the United States by modernizing interiors, expending offerings and increasing staffing levels, among other improvements. Its Backstage stores, on the other hand, were introduced in 2015 and serve as the firm’s off-price concept, offering top brands at a discount.
Macy’s also rolled out its experiential bet, Story, in April. A year after acquiring the New York City-based concept shop, the retailer debuted the 1,500-square-foot boutiques at 36 of its locations in 15 states across the country, including its Herald Square flagship.
“We had another quarter of double-digit growth in our digital business, and mobile continues to be our fastest-growing channel,” Gennette added. “We are pleased with the progress we are making on our strategic initiatives as they continue to drive top-line growth, keeping us on track to reach our 2019 goals. We believe these initiatives, coupled with productivity improvements, position our company well for long-term profit growth.”
Reaffirming its full-year guidance, Macy’s expects sales to remain flat with that of the prior year, while same-store sales are estimated to climb by 1% in 2019. Adjusted earnings per share are predicted to be in the range of $3.05 to $3.25.
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