© Reuters. Macy’s (M) Soars On Earnings Pace, Strong Guidance; analyst praises execution
By Senad Karaahmetovic
Macy’s (NYSE:) shares traded nearly 10% higher in pre-open Thursday after the company reported better-than-expected fourth-quarter results and offered upbeat earnings guidance.
Macy’s reported $1.88 on revenue of $8.3 billion, beating analysts’ median estimate of a profit of $1.58 per share on revenue of $8.22 billion. Total sales fell 4.6% year-over-year, while inventory decreased 2.6% to $4.27 billion. Comparable sales for the quarter fell 3.3%.
“We successfully navigate 2022 from a position of financial and operational strength. Despite an increasingly volatile macroeconomic climate, through continued execution of our Polaris strategy, we have remained agile, pivoted to meet customer demand, and elevated our focus on inventory management,” said Jeff Gennette, president and CEO of Macy’s.
For all of 2023, Macy’s expects EPS to be $3.89 at the midpoint of its guidance, beating consensus earnings of $3.84 per share. Net sales are seen in the range of $23.7-24.2 billion, below the consensus of $24.29 billion. Overall, sales are expected to fall 1-3% yoy.
The company “anticipates that the high level of uncertainty within the macroeconomic environment will continue in 2023.” As a result, it is “taking a prudent approach to its outlook, reflecting potential differences in the severity and duration of macroeconomic headwinds, offset by how the company may respond.”
Analysts at Vital Knowledge described the company’s execution as one of the best in the retail industry.
Macy’s is “focusing on what they can control (costs, inventory management, etc.), resulting in above-plan EPS and 2023 guidance that is pretty impressive considering the circumstances. If people like TGT and KSS, they should love Macy’s (especially with a ~5x PE and EV/EBITDA multiple),” they said.
