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Macy & # 39; s (M) easily beat the first quarter results and comparable early Monday sales forecasts, but did not generate revenue and the department store chain warned of the potential impact of new tariffs in China, threatened by President Trump. Macy's stock fell.
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Macy's earnings
estimates: Wall Street expects Macy's earnings per share to plummet by 31 percent to 33 cents. Revenues are expected to reach $ 5.529 billion, largely unchanged from last year. Consensus Metrix expects a 0.1% drop in same-store sales, which includes stores that have been open for more than a year and online sales.
Results: EPS of 44 cents on revenues of $ 5.5 billion. Same store sales increased 0.6% in property and 0.7% in ownership and license.
Perspective: Management has approved its previous recommendations. In February, Macy's guided BPA 2019 between $ 3.05 and $ 3.25 in fixed-income sales, with stable finished product sales of up to 1%.
"The trend in our physical sales improved sequentially in the first quarter, thanks to Growth50 and Backstage, and we recorded a new quarter of double-digit growth in our digital business, and mobile telephony continues to grow. To be our fastest growing channel, "said the president. and CEO Jeff Gennette.
But he later told analysts that Macy's forecast did not include another round of Chinese tariffs that Trump threatened to impose on more than $ 300 billion in consumer imports. .
"It's hard to find a path that will not impact customers," he said. "This will affect many categories of apparel and accessories" among Macy's private label and national brands.
However, he added that the company has put in place strategies that should mitigate the impact on buyers.
Macy's stock
Macy's stock was down 1% to 21.57 on the stock market today, after a first on the earnings report. The stock has a low composite rating of 9 out of 99. Its EPS rating is 50, which also indicates lower earnings growth.
MarketSmith's analysis shows that the relative strength of Macy's stock has also deteriorated in recent months, indicating that the stock is doing worse than the S & P 500 index in his outfit.
Among other retail stocks, department stores JCPenney (JCP) was down 2.8%, Norstroms (JWN) lost 2% and Kohl (KSS) fell by 1%.
Macy's stock has collapsed after third quarter earnings. And in January, Macy's shares suffered their worst loss in a day. At that time, Macy's was reducing its earnings and sales per store forecast for 2018 – the results of which had not yet been reported – and the chain had posted disappointing comparable store sales for the period of crucial vacation.
The company is better off when it released its fourth quarter results, even though its earnings outlook for 2019 was below expectations. Macy's said that a new restructuring plan would save her $ 100 million a year. The plan included simplifying Macy's management structure to help the company adapt more quickly to changing consumer demands.
Store Closures, Rates
As more and more customers buy online and business chains reduce their sales, Macy's has added its overpriced retail spaces, Backstage, to dozens of new locations. The company plans to add more in the coming months.
Macy's management in February said Backstage spaces had "a lot to do" for the company. The company has also tried to focus more sales efforts on its main section and mobile purchases.
While Macy's and other retailers are closing stores, one analyst is predicting thousands more closures as the United States and China prepare for a fierce battle over trade.
Jay Sole, an analyst at UBS, said tariff escalation could create "serious inventory and discount shocks", adding to the efforts already made by retailers to lower prices in order to attract customers in the stores.
He also said that Macy's stock, as well as other stores like Kohl (KSS) and Ross Stores (ROST), could fall by 40% due to escalating trade.
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