Cincinnati—Macy’s Inc. provided a preview today of its fourth quarter and full 2014 earnings report, one that promises to be better-than-expected.
“We are very pleased with our fourth quarter performance, which represents a strengthening trend from the third quarter and spring season,” said Terry J. Lundgren, chairman/ceo of Macy’s Inc. “In particular, we believe that we have an excellent foundation on which to continue to grow sales and earnings, as described in last month’s moves to restructure our merchandising and marketing organizations, and today’s announcements on new senior executive appointments and the agreement to acquire Bluemercury Inc.”
The company currently expects full-year 2014 earnings of between $4.35 and $4.37 a share, which is higher than its previous forecast for $4.25 to $4.35 a share. This estimate excludes charges of approximately $100 million to $110 million related to the previously announced merchandising and marketing restructuring, store and field adjustments, store closings and asset impairment charges, as well as approximately $17 million of interest expense related to the make-whole premium for the previously announced early retirement of debt.
Analysts’ average estimate expected Macy’s Inc. to earn $4.35 a share for the full year.
Comparable store sales for fourth quarter saw a 2.5% gain in line with the department store company’s previous forecast. “This calculates to growth in comparable sales on an owned plus licensed basis in the full-year 2014 of 1.4%. On an owned basis, fourth quarter comparable sales were 2%, (in line with previous guidance of 1.9% to 2.4%).
Macy’s, Inc. is scheduled to report fourth quarter sales and earnings on Tuesday, Feb. 24.
In other news from Macy’s Inc. today, the company said it has signed an agreement to acquire Bluemercury, Inc., widely recognized as America’s largest and fastest-growing luxury beauty products and spa services retailer, for $210 million in cash.
The transaction is expected to be completed in Macy’s, Inc.’s fiscal first quarter which ends on May 2.
Bluemercury, based in Washington, D.C., operates about 60 specialty stores in 18 states, typically in prime street-level locations and urban lifestyle centers, as well as an online business.
Jeff Gennette, president of Macy’s, Inc., will concentrate more of his time on “facilitating broader growth strategies within Macy’s existing omnichannel businesses to attract new shoppers to Macy’s branded and private brands, and to strengthen customer relationships, “consistent with Macy’s single view of the business across stores, online and mobile.” Going forward, Gennette will oversee Macy’s merchandise planning, as well as maintain oversight responsibility for merchandising and marketing of Macy’s stores and digital, and private brand product development. He continues to report to Lundgren. In broadening his purview, Gennette has relinquished his day-to-day responsibilities as Macy’s chief merchandising officer.
Timothy Baxter, previously Macy’s executive vice president and general merchandise manager for ready-to-wear, has been promoted to succeed Gennette as Macy’s Chief Merchandising Officer.
Molly Langenstein, previously executive vice president for men’s and kids private brands, has been promoted to Macy’s Chief Private Brands Officer, succeeding Tim Adams.
Peter Sachse, Macy’s chief stores officer since 2012, has moved to a new role as Macy’s Chief for Innovation and Business Development.