Macy’s profit beats Wall Street expectations
ASSOCIATED PRESS February 26, 2013 8:28AM
NEW YORK — Macy’s reported a fourth-quarter profit that beat Wall Street expectations as its strategy of tailoring merchandise to local markets paid off during the holiday season.
The department store chain, which also operates Bloomingdale’s stores, also said Tuesday that it expects that same strategy to help increase revenue at stores open at least a year by 3.5 percent in fiscal 2013. That’s on top of the increase of 3.7 percent for 2012. The measure is a key indicator of health because it strips out the impact of newly opened and closed locations.
Shares of Macy’s rose 4.6 percent at $40.30 in premarket trading.
“Going into 2013, our team is moving ahead with new plans and actions to sharpen our approach to localized merchandise assortments and marketing,” CEO Terry Lundgren said in a statement.
Like many retailers, Macy’s had a slow start to the fourth quarter because of the lingering effects of Superstorm Sandy and ongoing economic uncertainty. But sales bounced back in January. Gross margin, or revenue after the cost of sales, slipped to 40.6 percent during the quarter, from 41 percent a year earlier, suggesting the company may have had to discount more heavily to sell items.
Competitor J.C. Penney reports its results Wednesday. The company, which ditched hundreds of sales in favor of “everyday pricing” last year, has been suffering as shoppers flee to competitors. Penney is expected to report its fourth straight quarter of big losses and sales drops.
The two companies are also locked in a lawsuit that alleges Penney violated Macy’s exclusive deal with home diva Martha Stewart.
For the period ended Feb. 2, Macy’s Inc. says it earned $730 million, or $1.83 per share. That compares with $745 million, or $1.74 per share, a year earlier, when the company had more shares outstanding.
Not including one-items such as expenses associated with the early retirement of debt, it earned $2.05 per share. Revenue was $9.35 billion, up from $8.72 billion a year ago.
Analysts expected a profit of $1.99 per share on revenue of $9.35 billion.
For the year, the company earned $3.24 per share on revenue of $27.69 billion. In 2013, the company expects earnings per share of $3.90 to $3.95.