Holiday Sales Success Buoys Macy’s Inc. Q4 Results

Cincinnati—Citing holiday sales that beat its management’s forecasts, Macy’s Inc. today reported a 12% in its fourth quarter profit.

For the quarter ended Jan. 28, the operator of Macy’s and Bloomingdale’s posted net income of $745 million, or $1.74 a share, compared with $667 million, or $1.55 a share, a year ago. Excluding one-time items, the department store retailer earned $1.70, beating analysts’ average estimate of $1.65.

Net sales rose 5.5% to $8.72 billion, again beating analysts’ estimate for $8.7 billion. Comparable store sales were up 5.2% while online sales (at Macys.com and Bloomingdales.com) soared 40%. Although online sales are included in comparable store sales, the company noted that its “online sales positively affected the company’s same-store sales by 1.7 percentage points in the fourth quarter.”

Gross margin narrowed to 41% from 41.3%.

Doubled Earnings Over Last Three Years

“We have more than doubled our earnings over the past three years, driven by innovative strategic initiatives that are being executed with discipline at both Macy’s and Bloomingdale’s,” said Terry Lundgren, chairman, president/ceo. “Our year was punctuated with a terrific holiday selling season as our customers responded to our assortment of most-wanted merchandise for gifts and self-purchase, as well as compelling marketing campaigns.”

Lundgren said the company’s results showed “tangible progress” of its My Macy’s localized buying program, integration of its in store, online and mobile units, and its MAGIC selling program which has taught new consumer engagement methods to more than 130,000 sales associates since 2010.

For its fiscal 2012, Macy’s Inc. forecast projected comparable store sales growth of 3.5%, with earnings in the range of $3.25 to $3.30 a share. Analysts’ average estimate expects $3.26.

“We believe this will be another exciting year in every aspect of growing our business,” Lundgren added. “This includes our online business, which we expect will exceed $2 billion in sales in 2012,” Lundgren added.

Macy’s Inc. plans to spend about $850 million on capital expenditures this year, including new Macy’s stores in Salt Lake City, and Greendale, Wisconsin, as well as five new Bloomingdale’s Outlet locations.

 

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