Macy’s Inc. announced second-quarter earnings that significantly exceeded Wall Street’s forecasts, prompting the department store operator to raise its full-year earnings and sales guidance. The company credited its strong performance to relaunch store efforts that have improved sales trajectories.
During the three-month period ending August 2, Macy’s reported adjusted earnings per share of 41 cents, surpassing analysts’ expectations of 18 cents. On a per-share basis, this year’s adjusted earnings of $1.18 easily eclipsed last year’s 53 cents. Net income shot up to a stunning $150 million. For some perspective, Macy’s net income for the most recent quarter was $87 million or 31 cents per share.
Indeed, Macy’s revenue for the quarter beat all expectations. It reached $4.81 billion – beating analysts’ estimate of $4.76 billion. The impact of the recall was significant enough that company net sales fell by nearly $30 million from this time last year. They declined from $4.94 billion to $4.81 billion.
Soon after these earnings, Macy’s lowered its full-year expectations. The firm has now raised its forecast for adjusted earnings to a range of $1.70 and $2.05 per share. That’s up from their prior forecast of $1.60 to $2 per share. It increased its revenue guidance to a range of $21.15 billion to $21.45 billion. That’s a substantial jump from the prior bottom line figure of $21B to $21.4B.
In an interview with CNBC, Macy’s CEO Tony Spring expressed confidence in the company’s position within the current retail environment.
“We’re just well-positioned right now for the environment we’re in to take share, to deliver for our customers and to provide a better experience.” – Tony Spring
These improvements show that Macy’s understands the importance of accommodating customer experiences with store remodels and strategic reformatting. The warm welcome these initiatives have received can be seen in their continued success in terms of sales during even the toughest economic climates.