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Macy's Q4 Beats Estimates, Sees 2013 Earnings Above View


Department store chain Macy's Inc. (M) on Tuesday reported a 2 percent decline in profit for the fourth quarter as higher revenues as well as same-store sales were offset by lower margins and an increase in expenses. Both revenue and earnings per share for the quarter beat analysts' expectations. Looking ahead, the company forecast earnings for fiscal 2013, above analysts' estimates.

Same-store sales for the fourth quarter rose 3.9 percent from the prior-year period. Same-store sales is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.

Online sales - macys.com and bloomingdales.com combined - were up 47.7 percent in the latest quarter. Online sales positively affected Macy's same-store sales by 3.3 percentage points and are included in the same-store sales calculation for Macy's.

Cincinnati, Ohio-based Macy's fourth-quarter net income was $730 million, down from $745 million in the year-ago period. However, earnings per share rose to $1.83 from $1.74 in the prior-year quarter, on lower number of shares outstanding.

Excluding expenses of $0.21 per share on the early retirement of about $700 million of outstanding debt and about $0.01 per share related primarily to the store closings, earnings per share for the quarter were $2.05, while adjusted earnings were $1.70 per share in the same period last year.

On average, fifteen analysts polled by Thomson Reuters expected the company to earn $1.99 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter rose 7 percent to $9.35 billion from $8.72 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $9.30 billion.

Gross margin declined to 40.6 percent from 41.0 percent in the same period last year.

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

Net sales for the year grew 5 percent to $27.69 billion from $26.41 billion last year. Same-store sales for the year increased 3.7 percent.

Analysts expected the company to earn $3.41 per share for the year on revenues of $27.64 billion.

Looking ahead to fiscal 2013, Macy's projects same-store sales growth of nearly 3.5 percent and earnings per share in a range of $3.90 to $3.95. Analysts expect the company to report earnings of $3.81 per share for the year.

M closed Monday's trading at $38.52. In Tuesday's pre-market, the stock is up $1.47 or 3.82 percent to $39.99.

by RTTNews Staff Writer

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