Macy’s (M) sales of $5.50 billion for the first quarter of fiscal 2019, which ended on May 4, fell marginally behind analysts’ estimate of $5.51 billion. However, the department store chain’s adjusted EPS of $0.44 crushed analysts’ forecast of $0.33. Macy’s stock was down 1.1% as of 1:44 PM ET today.
On a year-over-year basis, Macy’s sales fell 0.7% in the first quarter while adjusted EPS were down 8.3%. Macy’s bottom line was dragged down by lower sales and higher expenses.
Macy’s same-store sales grew 0.7% on an owned-plus-licensed basis, marking the sixth straight quarter of same-store sales growth. Macy’s sales benefitted from its Growth50 strategy and off-price Backstage business. Also, Macy’s digital sales grew by double digits in the first quarter, with mobile remaining the company’s fastest-growing channel.
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After achieving positive results from its Growth50 strategy, which tested several initiatives in 50 select stores, Macy’s is expanding the concept to 100 additional stores. Macy’s mobile apps delivered over $1 billion in sales in fiscal 2018. The company continues to invest in enhancing its mobile apps.
Macy’s opened nine off-price Backstage stores-within-stores in the first quarter of fiscal 2019, ending the quarter with 174 Backstage stores within Macy’s locations and seven freestanding Backstage stores.
Macy’s retained its guidance for full-year fiscal 2019. The company continues to expect its fiscal 2019 same-store sales growth in the range of 0.0%–1.0% on an owned and owned-plus-licensed basis. It expects net sales essentially unchanged in fiscal 2019 compared to the previous fiscal year.
Macy’s expects its fiscal 2019 EPS in the range of $3.05–$3.25. This EPS guidance doesn’t take into account settlement charges associated with the company’s defined benefit plan and the impact of impairment and other costs.