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Charles Sykes | AP
Macy's first-quarter results and same-store sales exceeded analysts' expectations, as its initiatives to refresh outdated stores and get more people to shop using its mobile app showed signs of profitability.
But its sales have dropped again compared to a year ago, as the chain of department stores continues to face many of the same challenges that affect all retailers today. It's not easy to attract people to the mall to buy clothes, whereas they might just buy online on Amazon, or on platforms like Stitch Fix and Rent the Runway .
Initially, its shares had risen by more than 7% in pre-commercial transactions. The stock was up about 3%.
Macy's also reaffirmed its earnings outlook published for the past year.
Here's what Macy reported about what analysts were waiting for, based on Refinitiv data:
* Earnings per share: 44 cents against 33 cents expected
* Revenue: USD 5.504 billion vs. USD 5.505 billion expected
* Same store sales: up 0.7% from a drop of 0.2% expected, whether owned or licensed
General Manager Jeff Gennette said that e-commerce revenues grew at a double-digit rate during the quarter, while mobile remained Macy's fastest growth channel.
Macy's net income for the quarter ended May 4 was $ 136 million, or 44 cents per share, compared with $ 139 million, or 45 cents per share, there is a year. This was ahead of analysts' expectations for 33 cents, based on Refinitiv data.
Sales rose from $ 5.541 billion to $ 5.504 billion. It was roughly in line with analysts' expectations for revenues of $ 5.505 billion.
Sales in Macy stores that had been open for at least 12 months, owned and licensed, increased by 0.7%, better than the expected decline of 0.2%.
For the 2019 fiscal year, Macy's still demand that net sales be about stable compared to the previous year. Same store sales held and licensed should be stable up to 1%. And Macy's still expects adjusted earnings per share to be in the range of $ 3.05 to $ 3.25. Analysts demanded an annual profit of $ 3.09 per share.
Macy's is trying to clean up her clothing offer because her stocks have been inflated in the past, with items left on unsold shelves, thus straining profits. More generally, he is still trying to find a fashion trend to compete with Zara, Lululemon and Madewell.
"We believe that the greatest vulnerability of the department store sector remains women's clothing – and in particular the need to better attract and retain new Generation Y and Generation Z customers," industry analysts said. retail sale in a research note.
Other recent Macy initiatives to attract buyers include the addition of rotating markets for popular brands in more than 20 stores, the use of virtual reality headsets for furniture sales, and the roll-out of mobile payment option in the United States to reduce costs and increase sales. Macy's also announced plans to start cutting some of its large stores, not requiring as much real estate.
Macy's, with a market capitalization of about $ 6.7 billion, has seen its shares fall by nearly 27% since the beginning of the year. This compares with the gains of about 5% of ETFs S & P 500 Retail ETF (XRT).
At the same time, tariffs are another imminent threat to retailers like Macy's. The White House has released a new list of about 300 billion worth of Chinese goods that President Donald Trump has said consider setting up with rates of up to 25%. The list includes everything from clothing and sports shoes to sporting goods and other accessories, which are often found at the mall.
– CNBC Courtney Reagan contributed to these reports.
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