Macy’s Q4 Earnings Beat, Sales Miss, Gives Cautious View

Macy’s Inc. (M – Analyst Report) posted fourth-quarter fiscal 2014 results, wherein earnings of $2.44 per share beat the Zacks Consensus Estimate by a couple of cents, and rose 5.6% from $2.31 earned in the prior-year quarter. My Macy’s localization initiatives, omnichannel integration and magic selling remained the driving factors. Moreover, share repurchase activity also supported the bottom line.

Macy’s Inc. – Earnings Surprise | FindTheBest

This Cincinnati, OH-based company and a Zacks Rank #3 (Hold) stock generated sales of $9,364 million that increased 1.8% year over year but fell short the Zacks Consensus Estimate of $9,392 million. Analysts believe that the holiday season was a soft one for Macy’s, which went on to provide a cautious outlook for fiscal 2015.

Comparable-store sales on an owned plus licensed basis grew 2.5% during the quarter, while on an owned basis, comparable-store sales jumped 2%.

Macy’s has undertaken restructuring endeavors and other strategic initiatives to enhance its top and bottom lines growth. Recently, with a view to expand its core signature Beauty business, Macy’s penned an all-cash deal to acquire Bluemercury for $210 million that is anticipated to close by the end of the first quarter of fiscal 2015. This renowned American spa services and luxury beauty products retailer, operates nearly 60 specialty stores across 18 states offering premier beauty brands.

Gross profit in the quarter inched up 1% year over year to $3,775 million. However, gross profit margin contracted 30 basis points to 40.3%. Adjusted operating income also grew 1% to $1,451 million, whereas operating margin shriveled 10 basis points to 15.5%.

Store Update

During fiscal 2014, the company opened five outlets and closed 22 locations. The company now plans to open a new Macy’s outlet in Ponce, PR and a Bloomingdale’s in Honolulu, HI in fiscal 2015. In the next fiscal year, a new Macy’s outlet will be opened in Kapolei, HI, along with a replacement Macy’s outlet in Los Angeles, CA.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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