Department store chain Macy's Inc. (M: Quote) on Wednesday reported a 38 percent increase in profit for the first quarter, reflecting higher comparable store sales and a surge in online sales. Earnings per share beat analysts' estimates.
The company reiterated its full-year earnings outlook, which is lower than analysts' current estimate, sending its shares down by 5 percent pre-market.
Macy's is among the first major retailers to report quarterly results each earnings season, and its performance provides a glimpse of what to expect from peers like JC Penney (JCP: Quote), Kohl's (KSS) and Saks (SKS: Quote).
Cincinnati, Ohio-based Macy's same-store sales for the first quarter rose 4.4 percent. Comparable-store sales or comps is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.
Macy's online sales grew 33.7 percent in the quarter. Online sales are included in the same-store sales calculation for the company and positively affected its same-store sales by 1.5 percentage points in the latest quarter.
Terry Lundgren, chief executive officer of Macy's said, "The momentum in our business at Macy's and Bloomingdale's continued to build in the first quarter, with sales and earnings that exceeded our expectations going into the year."
Lundgren added, "The quarterly data clearly demonstrates the strength of our results as we continue to implement our key strategies - My Macy's merchandise localization; omnichannel integration of stores, online and mobile; and MAGIC Selling for enhanced customer engagement."
Macy's net income for the first quarter rose to $181 million or $0.43 per share from $131 million or $0.30 per share in the year-ago period.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 4.3 percent to $6.14 billion from $5.89 billion in the prior-year period. Analysts had a consensus revenue estimate of $6.13 billion.
Gross margin declined to 38.8 percent from 39.1 percent in the same period last year.
Looking ahead to fiscal 2012, Macy's reiterated its outlook for earnings per share in a range of $3.25 to $3.30. Analysts expect the company to earn $3.41 per share for the year.
Macy's continues to forecast same-store sales growth for the remainder of the year of about 3.5 percent.
When added to the first quarter's reported results, the company expects full-year same-store sales growth as a whole to be about 3.7 percent, slightly higher than its prior view for same-stores sales increase of about 3.5 percent.
M closed Tuesday's trading at $39.51, down $0.78 on a volume of 10.79 million shares. In Wednesday's pre-market, the stock is down $2.01 or 5.09 percent to $37.50.
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by RTT Staff Writer
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