Macy’s Inc. Q4 Profit, Sales Top Estimates

Macy's lets the cat out of the box: the department store now ships to more than 100 countries worldwide thanks to a partnership with FiftyOne Global Ecommerce.

Macy’s lets the cat out of the box: the department store now ships to more than 100 countries worldwide thanks to a partnership with FiftyOne Global Ecommerce.

New York—While Macy’s Inc. may have reported a 2% decline today in its fourth quarter profit, the department store giant posted earnings and net sales ahead of analysts’ predictions.

For the quarter ended Feb. 2, Macy’s Inc. reported a profit of $730 million, down from $745 million in fourth quarter of last year. However, earnings per share rose to $1.83 from $1.74 in the prior-year quarter, on lower number of outstanding shares.

Excluding expenses of 21 cents a share on the early retirement of about $700 million of outstanding debt and about 1 cent a share related primarily to the store closings, adjusted earnings per share for the quarter were $2.05, while adjusted earnings were $1.70 a share in the same period last year.

Net sales for the quarter rose 7% to $9.35 billion from $8.72 billion in the prior-year quarter. Comparable store sales rose 3.9% from the prior-year period, while gross margin narrowed to 40.6% from 41%. Online sales, which include macys.com and bloomingdales.com combined, were up 47.7%. Online sales positively affected Macy’s comparable store sales by 3.3 percentage points and are included in the comparable store sales calculation for Macy’s Inc.

The results were better than analysts had forecast: $1.99 a share on sales of $9.30 billion.

“2012 was another great year in our company’s evolving story of growth,” said Terry Lundgren, chairman/ceo. “The numbers reflect our success in pursuing the right strategies, and executing them with conviction in every part of the business with a talented team we consider to be the best in retailing. We again added more than $1 billion in top-line sales growth in 2012. Comp sales rose by 3.7% for the year, on top of increases of 5.3% in 2011 and 4.6% in 2010. Earnings per share grew by double-digits for the fourth consecutive year.”

‘Sharpen Our Approach to Localized Merchandise Assortments’ in 2013

For its fiscal 2012, Macy’s Inc. net income rose to $1.34 billion, or $3.24 a share, from $1.26 billion, or $2.92 a share, in the prior year. Adjusted net earnings per share were $3.46, compared to $2.88 a share in the previous year.

Net sales for the year grew 5% to $27.69 billion from $26.41 billion last year. Comparable store sales for the year increased 3.7%

Analysts’ consensus expected the company to earn $3.41 a share for 2012 on revenues of $27.64 billion.

Looking ahead to fiscal 2013, Macy’s Inc. projects comparable store sales growth of nearly 3.5% and earnings per share in a range of $3.90 to $3.95. Analysts’ estimate expects earnings of $3.81 a share for the year.

“We continue to see significant upside opportunity ahead in those strategies that have worked so well since we reorganized the company in 2009,” Lundgren said. “Going into 2013, our team is moving ahead with new plans and actions to sharpen our approach to localized merchandise assortments and marketing, which we continue to believe is Macy’s sustainable competitive advantage. We are accelerating progress in omnichannel strategies at Macy’s and Bloomingdale’s to bring together our efforts in stores, online and mobile in a manner that satisfies emerging shopping patterns and capitalizes on the strength of our inventory regardless of where the customer demand occurs.”

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com