Macy's (M) reported earnings on Wed 14 Aug 2019 (b/o)

** charts after earnings **

 

Macy's misses by $0.17, reports revs in-line; lowers FY20 EPS below consensus (does not include latest tariff tranche), reaffirms FY20 comps

Reports Q2 (Jul) earnings of $0.28 per share, excluding non-recurring items, $0.17 worse than the S&P Capital IQ Consensus of $0.45; revenues fell 0.5% year/year to $5.55 bln vs the $5.55 bln S&P Capital IQ Consensus.

Comps +0.2% vs. +0.3% estimates; gross margin +60 bps Q/Q but -160 bps yr/yr to 38.8%, below estimates.

Co issues guidance for FY20, sees EPS of $2.85-3.05 from $3.05-3.25, excluding non-recurring items, vs. $3.07 S&P Capital IQ Consensus; reaffirms FY20 revs flat at $24.97 bln vs. $24.88 bln S&P Capital IQ Consensus; comps +0-1%. 

Macy's, Inc.'s revised Adjusted Diluted EPS guidance does not reflect the fourth tranche of tariffs on goods from China. In light of the announcement by the United States Trade Representative on August 13, 2019, the company is evaluating the details of these tariffs and is actively working with its vendor partners and suppliers in China to help mitigate potential impact.

"Macy's, Inc. delivered another quarter of comparable sales growth. That said, we had a slow start to the quarter and finished below our expectations. Rising inventory levels became a challenge based on a combination of factors: a fashion miss in our key women's sportswear private brands, slow sell-through of warm weather apparel and the accelerated decline in international tourism. We took markdowns to clear the excess Spring inventory and are entering the Fall season with the right inventory to meet anticipated customer demand," said Jeff Gennette, Macy's, Inc. chairman & chief executive officer. "While we had seasonal inventory challenges in Spring, there are many areas of the business that are performing well, notably our Destination Businesses. We continue to see healthier sales within our brick and mortar business, led by our Growth50 stores and Backstage expansion. Our digital business posted its fortieth consecutive quarter of double-digit growth, and mobile remained our fastest growing channel." "Our 2019 strategic initiatives are on track to contribute to sales growth in the back half of the year, and we have plans to drive productivity and improve gross margins."