Macy's Soars on Sales, Earnings Beat

This was the second straight quarter of same-store sales growth and the best quarter of comps in years for Macy's

This was the second straight quarter of same-store sales growth and the best quarter of comps in years for Macy's

Shares of Macy's opened at $32.10 on Wednesday, Marketbeat reports. The firm had revenue of $8.67 billion for the quarter, compared to analysts' expectations of $8.70 billion. Enterprise Financial Services Corp now owns 5,348 shares of the company's stock valued at $135,000 after purchasing an additional 2,706 shares in the last quarter. The sales of the store got an increase of 4.2 percent compared to the expected 1.4 percent.

Retail giant Macy's posted first quarter earnings that exceeded expectations thanks to double-digit growth in digital sales as well as robust sales at its physical stores for all its main brands. The company has come to a mutual agreement to end the joint venture with Fung Retailing Limited. Instead, Macy's will remain on Alibaba's (NYSE: BABA) TMall platform and focus efforts there. The retailer's top markets overseas include China, the United Kingdom and Brazil.

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"Tax cuts, bonuses and good tax refunds have all been a windfall to consumers who have responded by increasing spending", said Neil Saunders, managing director of GlobalData Retail. "Today's results answer in the affirmative ... suggesting that Macy's recovery is gaining momentum". Optimism from the quarterly results is affecting how the retailer perceives the rest of the year: Macy's raised its earnings guidance for 2018 by $0.20 per share, to between $3.75 and $3.95 per share. Excluding one-time items, Macy's earned 48 cents a share, 11 cents better than what analysts had expected.

Revenues increased by about 3.6% to $5.5 billion, again edging above Wall Street's estimates. Three research analysts have rated the stock with a sell rating, twelve have assigned a hold rating, six have assigned a buy rating and one has given a strong buy rating to the company. Part of the jump can be attributed to the fact that Macy's shifted a friends and family promotional event to the first quarter from the second quarter this year.

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For the full year, Macy's expects earnings per share of between $3.75 and $3.95, $0.20 higher than its previous forecast. LSV Asset Management now owns 3,916,854 shares of the company's stock valued at $98,665,000 after buying an additional 144,600 shares during the last quarter. Macy's's revenue for the quarter was up 1.8% on a year-over-year basis. Morgan Stanley downgraded Macy's from an "equal weight" rating to an "underweight" rating and dropped their target price for the company from $29.71 to $25.00 in a report on Thursday, May 10th. Just a few days prior, Deutsche Bank put out a new note saying there's "limited upside" for investors in the department store space.

The company also stated comparable sales on an owned basis that were up 3.9 percent in the first quarter of 2018 contrast to the first quarter of 2017. BMO Capital Markets set a $38.00 price target on shares of Macy's and gave the company a buy rating in a research report on Friday, January 5th. It allows shoppers to rack up points on purchases that can them be redeemed at Macy's stores or online. We are maintaining a healthy inventory position, which helped us deliver improved gross margin.

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Brokerages expect Macy's Inc.

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