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Macy's, DICK'S Q2 Results Down; Adjust FY22 Outlook

macysdicks aug23 lt

Retailers Macy's, Inc. and DICK'S Sporting Goods Inc. reported weak profit and sales in their respective second quarters. However, adjusted earnings topped market estimates.

The companies also adjusted their fiscal 2022 outlook. While Macy's trimmed its full-year guidance, sporting goods retailer raised its earnings and consolidated same store sales guidance for the full-year 2022.

In pre-market activity on the NYSE, Macy's shares were gaining around 1.8 percent to trade at $18.94, and Dicks Sporting shares were gaining around 2.8 percent at $$113.40.

Macy's

For fiscal 2022, Macy's now expects adjusted earnings per share in a range of $4.00 - $4.20, lower than prior guidance range of $4.53 - $4.95. Net sales are now expected in a range of $24.34 billion to $24.58 billion, revised down from prior guidance range of $24.46 billion to $24.70 billion.

Analysts on average expect the company to earn $4.51 per share for the year on sales of $24.36 billion, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Adjusted EBITDA margin is now projected to be approximately 10.5 percent for the fiscal year, down from previously expected 11.2 percent to 11.7 percent.

The outlook for the remainder of the year was trimmed to mainly reflect continued deterioration of consumer discretionary spending in some of the categories and the level of inventory within the industry.

In its second quarter, Macy's net income declined to $275 million from $345 million a year ago. Earnings per share were $0.99, compared to $1.08 last year.

Second-quarter adjusted earnings per share were $1.00 compared to $1.29, a year ago. Analysts estimated earnings of $0.85 per share for the quarter.

Net sales declined to $5.60 billion from $5.65 billion last year. Analysts estimated $5.49 billion in revenue.

Comparable sales were down 1.5 percent on an owned basis and down 1.6 percent on an owned-plus-licensed basis.

Meanwhile, Comparable sales were up 4.3 percent on an owned basis and 4.4 percent on an owned-plus-licensed basis, from the pre-pandemic 2019.

DICK'S Sporting Goods

For DICK'S Sporting, fiscal 2022 earnings are now expected in a range of $8.85 to $10.55 per share, up from $7.95 to 10.15 expected earlier. Adjusted earnings are now expected in a range of $10.00 to 12.00 per share, higher than previous outlook in a range of $9.15 to 11.70 per share.

Analysts expect the company to report earnings of $10.87 per share for the year.

The company also revised outlook for consolidated same store sales, which is now expected to decline 2 percent to 6 percent, while previous view was a decline of 2 percent to 8 percent.

For the second quarter, DICK'S net income declined to $318.5 million or $3.25 per share from $495.5 million or $4.53 per share in the prior-year quarter. Adjusted net income was $3.68 per share, compared to $5.08 per share in the year-ago quarter.

Net sales for the quarter decreased 5 percent to $3.11 billion from $3.27 billion in the same quarter last year. Comparable store sales declined 5.1 percent.

The Street was looking for earnings of $3.57 per share on net sales of $3.07 billion for the quarter.

On Monday, DICK'S Board of Directors declared a quarterly dividend of $0.4875 per share, payable in cash on September 30 to stockholders of record at the close of business on September 9.

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