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Macy's Holiday Comps. Rises, But Cuts 2018 Profit View; Stock Plunges

Macy's Inc. (M) reported that comparable sales--owned plus licensed-- for the months of November and December 2018 increased 1.1 percent. Comparable sales owned for the period rose 0.7 percent. It cut annual sales and earnings guidance.

".....The holiday season began strong - particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas," said Jeff Gennette, chairman and chief executive officer of Macy's Inc.

In Thursday pre-market trade, M is currently trading at $25.96, down $5.75 or 18.13 percent.

The company lowered its fiscal year 2018 earnings per share, excluding settlement charges, impairment and other cost, guidance to a range of $3.95 to $4.00 from the prior range of $4.10 to $4.30 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $4.23 per share for fiscal year 2018. Analysts' estimates typically exclude special items.

For 2018, the company now expects net sales growth to be about flat, compared to prior range of 0.3 percent to 0.7 percent increase.

Gennette said, "Looking back at 2018, we met our goal of returning the company to growth. Our revised guidance is above the expectations we set at the start of the fiscal year, and we expect to deliver our fifth consecutive quarter of positive comparable sales, including 'comping the comp' of the 2017 holiday season. The North Star Strategy is gaining traction, and the entire organization is engaged and motivated to continue improving our performance in 2019."

Macy's comparable sales on an owned plus licensed basis are expected to about 2.0 percent for the fiscal year 2018. Earlier the company projected comparable sales on an owned plus licensed basis to increase between 2.3 percent and 2.5 percent.

Comparable sales on an owned basis for the year are still expected to be 20 to 30 basis points below comparable sales on an owned plus licensed basis in fiscal 2018.

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