Macy’s Stock Surges ~7% in Pre-Market Hours on Strong Q1 Results
Macy’s tops estimates
Macy’s (M) stock was up about 7% in pre-market trading as of 9:11 AM EST, as the company topped analysts’ sales and earnings estimates for the first quarter. The company’s sales grew 3.6% to $3.5 billion in the first quarter, surpassing analysts’ expectation of $3.4 billion. Macy’s adjusted EPS of $0.48 handily exceeded analysts’ estimate of $0.37 and was a major improvement compared to the adjusted EPS of $0.26 in the first quarter of 2017.
Excluding gains from asset sales, the company’s adjusted EPS grew to $0.42 compared to $0.12 in the first quarter of 2017.
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The company’s same-store sales grew 3.9% on an owned basis and rose 4.2% on an owned-plus-licensed basis.
Heading in the right direction
Macy’s better-than-expected results in the fiscal first quarter reflect the improvement in the sales of its physical stores and double-digit growth in the digital business. The company has been enhancing its merchandise assortment and marketing efforts under its North Star Strategy program. Macy’s has been focusing on growth categories like beauty and also on the expansion of its off-price Backstage stores.
Strong holiday sales helped Macy’s deliver higher sales in the fourth quarter of 2017 after 11 straight quarters of decline. The company’s sales growth in the first quarter of 2018 shows that its strategies are helping to enhance its numbers.
Company raises guidance
Following a strong first quarter, Macy’s raised its fiscal 2018 adjusted EPS guidance to the range of $3.75 to $3.95 compared to the previous guidance range of $3.55 to $3.75. The company expects its overall sales to be in the -1.0% to 0.5% range in the current fiscal year. Macy’s now expects its same-store sales to rise between 1% to 2% on an owned-plus-licensed basis. The company earlier expected its same-store sales to be flat to up 1.0% in fiscal 2018 and overall sales to decline in the 0.5% to 2.0% range in fiscal 2018.