Macy's Inc Stock Surges on Strong Q1 Earnings Beat

Macy's Inc Stock Surges on Strong Q1 Earnings Beat

Macy's Inc Stock Surges on Strong Q1 Earnings Beat

M stock was up 9% as of Wednesday morning. 1,792,693 shares of the company's stock were exchanged, compared to its average volume of 10,118,120. This is up 3.6% from its revenue of $5.35 billion that was reported in the first quarter of the previous year. However, the company beat that expectation by a wide margin, producing earnings in the amount of $0.48 per share. At 48 cents, the company's earnings per share were 12 cents higher than the FactSet consensus of 36 cents.

Shares of NYSE:M traded up $0.15 during trading on Friday, reaching $29.79. Over the last quarter, insiders sold 107,392 shares of company stock valued at $3,173,164. This was the second straight quarter of same-store sales growth.

On the call, Gennette attributed some of the gains to a 10 percent uptick in global 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.

The retailer once again posted double-digit sales growth from digital sales, thanks in part to improvements the company has made to its website and app.

"Our first quarter performance reflects solid execution of our North Star Strategy, counting merchandising and marketing activities". It also had significant improvements in worldwide tourism, which was up 10 percent - its best numbers since 2014. Taken together, these positive factors give us confidence to raise both our sales and earnings guidance for the fiscal year. The company beat on revenue and earnings while reporting a marked increase in same-store sales.

The quarterly results marked a turnaround from the declines that Macy's has been clocking on a regular basis for the past few years, as the company has shed stores and employees in an effort to stabilize. Following the sale, the chief financial officer now directly owns 67,515 shares of the company's stock, valued at $1,984,265.85.

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Macy's also said business got a lift from an increase in spending from global tourists, the first time since 2014. ING Groep NV raised its position in Macy's by 20.6% during the first quarter. "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. 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.

Total sales in 2018 are predicted by Macy's to climb as much as half a percent. "The winning formula for [Macy's] is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience".

Macy's shares rose $2.67 to $32.60 on Wednesday.

Looking ahead, Macys anticipates full year 2018 diluted earnings of $3.75 to $3.95 per share.

As the recently-floundering retailer keeps raising its outlook, though, it also risks creating expectations it can't meet.

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