Shares of Macy’s Inc. shot up in early trading on Thursday as the retailer showed some unexpected strength on the bottom line as it navigated a tough sales environment.
The company’s adjusted earnings per share fell to 21 cents in the third quarter from 52 cents a year earlier, but that was well ahead of the breakeven performance analysts had penciled in, according to FactSet.
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Net income fell 60 percent to $43 million, or 15 cents a diluted share, from $108 million, or 39 cents, a year earlier.
Revenues for the three months ended Oct. 28 decreased 7.8 percent to $5 billion from $5.5 billion a year earlier.
Jeff Gennette, chairman and chief executive officer of Macy’s, said: “We delivered better-than-expected top- and bottom-line third-quarter results and are entering the holiday period in a healthy inventory position. Our portfolio of nameplates are leading gift-giving destinations across the value spectrum offering exclusive products. We have refined our gift assortment, simplified our promotions and improved our shopping experience. Looking forward, we have strong continuity with Tony Spring transitioning to CEO in February and I am confident he and our leadership team will guide Macy’s Inc. to sustainable long-term profitable sales growth in the future.”
The Macy’s division logged a 7.6 percent comparable sales decline on an owned basis in the quarter and a 6.7 percent drop when the licensed businesses were included. Bloomingdale’s fared better with a 3.2 percent owned comp decline and a 4.4 percent drop with the licensed businesses. And the Bluemercury beauty business comped up 2.5 percent on an owned basis.
Inventories at the end of the quarter were down 6 percent from a year earlier and down 17 percent compared with 2019.
Macy’s narrowed its guidance for adjusted EPS for the full year and is now looking for profits to range from $2.88 to $3.13, where the outlook previously stood at $2.70 to $3.20.