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Macy’s Q2 2018 Earnings Could Beat Analysts’ Expectations

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Analysts’ expectations

Macy’s (M) exceeded analysts’ earnings expectations in seven out of the past nine quarters. Analysts expect Macy’s EPS, excluding one-time items, to grow 4.2% on a YoY (year-over-year) basis to $0.50 in the second fiscal quarter, which ended on August 4.

Macy’s is scheduled to announce its second fiscal quarter results on August 15. Nordstrom (JWN) is scheduled to announce its results after the financial markets close on August 16. Analysts expect Nordstrom’s adjusted EPS to rise over 29% to $0.84 in the second fiscal quarter.

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Strong growth rate in the previous quarter

Macy’s adjusted EPS of $0.48 in the first fiscal quarter beat analysts’ consensus expectation of $0.37. Excluding impairment charges and other one-time items, Macy’s adjusted EPS grew 84.6% on a YoY basis in the first fiscal quarter. The growth was driven by higher sales and the impact of lower taxes. Macy’s cost containment efforts also boosted the earnings growth in the first fiscal quarter.

Excluding the impact of asset sale gains, Macy’s adjusted EPS was $0.42 in the first quarter of fiscal 2018—compared to $0.12 in the first fiscal quarter of 2017.

Fiscal 2018 earnings expectations

Based on the revised guidance issued in May, Macy’s expects its adjusted EPS to be $3.75–$3.95 in fiscal 2018—compared to $3.77 in fiscal 2017. The guidance excludes the impact of settlement charges related to Macy’s defined benefit plans as well as impairment and other costs.

Next, we’ll discuss analysts’ recommendations for Macy’s stock.

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