Macy's Q1 Earnings Report: What You Need To Know

This was the second straight quarter of same-store sales growth and the best quarter of comps in years for Macy's

This was the second straight quarter of same-store sales growth and the best quarter of comps in years for Macy's

Both reports took a toll on Macy's stock price. The stock had a trading volume of 393,408 shares, compared to its average volume of 10,137,291. Excluding one-time items, it earned 48 cents per share. However, the company actually generated revenue in the amount of $5.5 billion, handily beating expectations. Comp sales on an owned plus licensed basis are seen rising 1%-2%.

"We exceeded our expectations and saw strong performance across all three brands - Macy's, Bloomingdale's, and Bluemercury - as well as across all geographic regions", Chief Executive Officer Jeff Gennette said.

On the call, Gennette attributed some of the gains to a 10 percent uptick in worldwide tourism spending, along with what he called "a very healthy inventory position", indicating that the retailer has made better merchandising decisions and relied less on discounting to sell through product. "Our best customer is responding well to the improvements we've made to her experience in our stores, on.com and through the Macy's app." .

Gannette also stressed the importance of the company's turnaround effort called the "North Star" strategy and its revamped merchandising and marketing operations for the better-than-expected quarter. We also saw continued healthy consumer spending and noteworthyimprovements in worldwide tourism.

The company is raising its profit guidance for fiscal 2018.

Same Store Sales - Perhaps the most impressive line on the report had to do with same store sales. Analysts were looking for $5.4 billion and 37 cents respectively. Insiders have sold a total of 107,392 shares of company stock worth $3,173,164 over the last ninety days.

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Macy's net sales in its first quarter amounted to US$5.54bln, coming in ahead of Wall Street's expectations of US$5.4bln. Analysts are estimating revenue of $24.73 billion for the year. In the same period past year, net income was $78 million, or $0.26 per share. The stock was last up about 9 percent.

Net income attributable to Macy's shareholders almost doubled to $139 million, or 45 cents per share, in the first quarter ended May 5. The retail company's net income from the same period of the year prior came in at $219 million. This compares to $80 million, or 1.5 percent of sales, in the first quarter of 2017, apart from premiums on the early retirement of debt. Part of the jump can be attributed to the fact that Macy's shifted a friends and family promotional event to the first quarter from the second quarter this year.

Net cash offered by operating activities was $322 million in the first quarter of 2018, contrast to $237 million in the first quarter a year ago. Net cash used by financing activities in the first quarter of 2018 was $99 million, contrast with $273 million previous year. "Clearly that's wrong because that's where Macy's is", said Bob Phibbs, CEO of the Retail Doctor, a consulting firm, in an interview after the results came out.

Full-year same-store sales on an owned-plus-licensed are expected to be up 1% to 2%.

Total sales in 2018 are predicted by Macy's to climb as much as half a percent.

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