Macy's Profit Grows As Snow Weighs On January Sales

Feb 25 2014, 8:52am CST | by

Macy's Profit Grows As Snow Weighs On January Sales
Photo Credit: Forbes Business

The polar vortex strikes again. Its newest victim: Macy’s fourth quarter revenue, which dropped 1.6% compared to the same time in 2012 thanks to a fall in comparable store sales during the snowy month of January.

Macy’s reported $9.2 billion in fourth quarter revenue, a decline over the $9.35 billion reported the same time last year and just a hair under the $9.28 billion the Street was expecting. Though the quarter was one week shorter than in 2012 (13 weeks in 2013 against 14 weeks in 2012), Macy’s noted that comparable store sales grew 3.6% in November and December, but by the end of January, that comparable sales figure fell to 1.4%, almost entirely because of the weather.

While we had expected a sales decline in January because of the calendar shift, the month was down further than we had expected and we are very disappointed with sales performance in January. In part, poor January sales were due to the unusually harsh winter weather across much of the country,” Terry Lundgren, Macy’s chairman, president and CEO said in a statement Tuesday morning. Lundgren noted that at one time or another in January, 244 Macy’s and Bloomingdale’s stores were closed because of the weather, and business “remained sluggish” through Valentine’s Day.

“Once warm spring weather arrives and our full assortment of fresh spring merchandise is in place, we believe customers will return to a more normalized pattern of shopping,” he said. “But based on our experience in January and early February, we are watching business trends closely.”

The retailer’s fourth quarter net income grew to $811 million, up from $730 million in the prior-year quarter, resulting in earnings of $2.16 per share, including special items like tax expenses and asset impairment charges. Excluding those items, fourth quarter profit came in at $2.31 per share, well above analyst estimates of $2.17 per share.

On a full year basis, Macy’s revenue increased incrementally, coming in at $29.93 billion against the $29.69 billion reported for full-year 2012. Full-year comparable sales were up 1.9%, and full-year net income was $1.49 billion, an increase compared to the $1.34 billion reported in 2012. This resulted in full-year earnings of $3.86 per share, including special items (like taxes and that asset impairment charge); excluding special items, full-year profit was $4 per share.

Looking ahead to 2014, Macy’s reiterated the sales guidance it issued in January, saying that comparable sales are expected to grow between 2.5% and 3%, and full-year earnings per share will fall between $4.40 and $4.50. Macy’s did not reference the 2,500 job cuts it also announced in January, reiterating only that it has plans for new Macy’s stores in Sarasota, FL., Las Vegas and the Bronx.

Shares of Macy’s initially fell more than 2% in Tuesday’s pre-market activity, likely because of the bad news about January sales. Year-over-year, the stock is up 37.8%, and in a research note issued last week by Citi Research analyst Oliver Chen, the stock still has room to grow. Chen rated Macy’s as a buy and gave it a $63 price target – $10 higher than its Monday closing price – and said that not only does Macy’s have the best brand portfolio and a strong omni-channel approach (like its ship-to-store and ship-from-store delivery options), it also has a strong chance of success with the ever-elusive but much-desired Millennial contingent.

“Since 2012 Macy’s has applied a tailored approach to attract the lucrative Millennial customer, with the launch of Impulse and mstylelab,” Chen said. “We are anticipating big expansions in Millennial brands, which we believe will attract new junior and young adult customers.”

Related from Forbes:

10 Secrets You Didn't Know About Macy's

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Young Europeans less informed about 'legal highs': Survey
Brussels, Aug 22 (IANS) Young Europeans are less informed about "legal highs" and the effects of drugs compared to a few years ago, a survey said.
 
 
Two US Ebola patients released from hospital
Washington, Aug 22 (IANS) Two US aid workers who contracted the Ebola virus while treating patients in west Africa have been discharged from the Emory University Hospital in Atlanta, the hospital said Thursday.
 
 
US doctor with Ebola to be released from hospital
Washington, Aug 21 (IANS) An American doctor who contracted the Ebola virus disease while treating patients in West Africa will be discharged from a US hospital Thursday, the aid group he worked for said.
 
 
Bengal, Singapore to work on study paper on business: Mamata
Singapore, Aug 21 (IANS) The West Bengal government, in association with the National University of Singapore, will create a study paper with focus parameters to facilitate entrepreneurs, Chief Minister Mamata Banerjee said Thursday.
 
 
 

Latest from the Network

Adele to perform on 'The X Factor'?
London, Aug 22 (IANS) If all goes as "The X Factor" bosses are planning, award winning songstress Adele could be a major attraction of the live shows of the British version of the music reality show later this year. "...
Read more on Celebrity Balla
 
Syrian army kills 140 IS fighters
Damascus, Aug 22 (IANS) At least 140 fighters of the Islamic State (IS) were killed Thursday in an ambush by the Syrian army near an airbase in al-Raqqa province, a media report said. The Syrian army ambushed the...
Read more on Politics Balla
 
Daniel Radcliffe is learning Japanese
Daniel Radcliffe is learning Japanese. The 25-year-old actor has been taking lessons in order to speak the East Asian language fluently but he admits he is struggling with it at the moment. He said: ''I just started...
Read more on Celebrity Balla
 
Karrueche Tran not 'ready' for baby?
Karrueche Tran reportedly doesn't feel ''ready'' to have children with Chris Brown. The 25-year-old singer sparked rumors earlier this week he and his on/off girlfriend were trying for a baby, but friends of the 26-year...
Read more on Celebrity Balla
 
Wilmer Valderrama sends Demi Lovato romantic birthday message
Wilmer Valderrama sent Demi Lovato a romantic birthday message on Instagram yesterday (08.20.14). The 34-year-old actor, who likes to keep his relationship private, took to the social networking site in a rare show of...
Read more on Celebrity Balla
 
Taylor Swift and John Mayer ignored each other at restaurant
Taylor Swift and John Mayer reportedly ignored one another as they dined separately at the same restaurant last night (08.20.14). The former couple - who dated five years ago - allegedly avoided eye contact as they...
Read more on Celebrity Balla
 
Defeated Indonesian presidential candidate accepts court ruling
Jakarta, Aug 22 (IANS) Former general Prabowo Subianto accepted the final ruling of the Constitutional Court that has summarily rejected all his allegations that challenged the result of Indonesia's presidential race,...
Read more on Politics Balla
 
Local polls announced in Taiwan
Taipei, Aug 22 (IANS) Electoral authorities in Taiwan Thursday announced the island's local polls in which over 10,000 public officials will be elected Nov 29. The island, for the first time, will be concurrently...
Read more on Politics Balla
 
Young Europeans less informed about 'legal highs': Survey
Brussels, Aug 22 (IANS) Young Europeans are less informed about "legal highs" and the effects of drugs compared to a few years ago, a survey said. More than a quarter of youngsters (29 percent) said they have not been...
Read more on Celebrity Balla
 
10 killed as Ukrainian troops battle rebels
Kiev, Aug 22 (IANS) At least 10 people were killed in Ukraine as government troops stepped up their offensive against independence-seeking rebels, authorities said Thursday. Five Ukrainian servicemen were killed...
Read more on Politics Balla