Did Macy’s Beat Fiscal 4Q15 Sales Estimates?



Macy’s reports fiscal 4Q15 earnings

Macy’s (M) pleased its investors by reporting a less-than-anticipated decline in its fiscal 4Q15 sales. The company reported net sales of $8.9 billion, exceeding the consensus Wall Street estimate of $8.8 billion for fiscal 4Q15, which ended January 30, 2016. Macy’s reported its fiscal 4Q15 and fiscal 2015 results on February 23.

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Sales continue to decline

Macy’s sales in fiscal 4Q15 fell 5.3% on a YoY (year-over-year) basis. This marked the fourth consecutive drop in sales growth. The decline in 4Q15 was primarily due to disappointing holiday sales in November and December. The company did see some improvement in its sales in January.

Same-store sales, on an owned plus licensed basis, fell 4.3% in 4Q15. On an owned basis, the company’s same-store sales fell 4.8% in 4Q15.

The company experienced a 4% decline in the number of transactions in the quarter. In the 4Q15 conference call, Karen M. Hoguet, Macy’s chief financial officer, stated that the company saw overall weakness in sales, mainly in cold weather goods. International tourist sales continued to be a sore spot in 4Q15 and impacted the company’s same-store sales by 1 percentage point. The company’s Bloomingdale’s stores suffered more due to lower international tourist sales than the Macy’s stores. This is because Bloomingdale’s has a geographic mix of locations with a heavier concentration of tourist sales.

Macy’s CFO stated that the categories that performed well in 4Q15 included cosmetics, fragrances, furniture, mattresses, and activewear.

Overall, the company’s sales fell 3.7% to $27.1 billion in fiscal 2015 on a YoY basis.

The iShares Russell 1000 Growth ETF (IWF) has 0.1% exposure to Macy’s.

Peers’ performances

Nordstrom (JWN) missed analysts’ sales estimates and reported lower-than-expected sales growth of 3.7% in fiscal 4Q15. Kohl’s (KSS) reported subdued sales growth of 0.8% in fiscal 4Q15. The fiscal 4Q15 sales of Dillard’s (DDS) fell 2.9%. Dillard’s experienced weak performance in the juniors’ and children’s apparel and shoes categories.

Overall, 4Q15 was a tough quarter for department stores. A competitive promotional environment led to higher markdowns and impacted the margins of the department stores. We’ll discuss this in the next part of this series.


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