Macy’s Inc. shares were going up on Tuesday after the department store chain reported fiscal first-quarter results that were down from the same time last year but better than expected. This was due to strong performance at its Bloomingdale’s and Bluemercury stores.
Even though same-store sales fell for the eighth quarter in a row compared to the same time last year, sales went up at Bloomingdale’s and Bluemercury for the thirteenth straight quarter.
AlphaSense’s transcript of the conference call after the earnings report says that CEO Tony Spring said, “We are reading and reacting to the dynamic economic environment and competitive promotional landscape in real time.” “We know that our customers, no matter how much money they have, respond to new styles, great prices, and a fun atmosphere.”
Stock M, +1.05% went up 0.9% in the morning, but it gave up gains of up to 5.1% earlier in the day.
Net income dropped from $155 million, or 56 cents per share, in the same quarter last year to $62 million, or 22 cents per share, this year.
Adjusted earnings per share dropped from 56 cents to 27 cents when one-time items were taken out. This was much higher than the 16 cents that FactSet predicted.
Net sales dropped 2.7% to $4.85 billion, which was just above the $4.82 billion that FactSet predicted. This is the eighth straight quarter that sales have gone down.
Same-store sales, which are usually sales at stores that have been open for at least a year, were down 1.2%, which was less than the 3.1% drop that FactSet thought would happen.
Sales at Macy’s stores went down 1.6% compared to the same time last year. Sales at Bloomingdale’s stores went up 0.8% and at Bluemercury stores went up 4.3%.
CEO Spring said, “When it comes to luxury, Bloomingdale’s and Bluemercury continue to be bright spots in our portfolio.”
Gross margin dropped from 40% to 39.2%, mostly because of more discounts for warmer weather products that didn’t sell as quickly, which cancelled out a drop in delivery costs.
As of May 4, goods in stock were worth $4.69 billion, which is 1.7% more than a year ago.
“Our customers across all three nameplates are still getting good deals on wages and jobs.” On the other hand, inflationary pressures are still there, and people are feeling the pinch, Spring said. “Both our fourth quarter earnings call and today’s update are based on the assumption that our customers will continue to think carefully about the purchases they make on their own time.”
Macy’s changed its full-year guidance for adjusted EPS for fiscal year 2024 from $2.45 to $2.85 to $2.55 to $2.90 and for net sales for the year from $22.2 billion to $22.9 billion to $22.3 billion to $22.9 billion.
The gross margin is expected to be 39% to 39.3%, up from 38.8% in 2023. This is because higher discounts on warmer-weather spring products will partially cancel out higher full-price and private-brand sales.
So far this year, the stock has lost 4.2%, while the SPDR S&P Retail ETF XRT, -0.76% has gone up 4.4% and the S&P 500 SPX, +0.02% has gone up 11.3%.
