Macy’s struggles, shares slide
Shares of Macy’s (NYSE:M) traded to the downside on Wednesday morning following a second quarter miss and disappointing guidance. Early in the session shares were down by more than 4.25%, or $2, as the market looked to price in the unexpected results. Macy’s, which operates under its own and the Bloomingdales brand, has felt pressure as consumers have started cutting back during this years back to school season. While the economy may be starting to show signs of life, many of the major markets in which the company operates are still in a fragile state.
The company’s reported results which fell short of analyst consensus estimates on both the top and bottom lines. Macy’s earned $281 million, or $0.72 per share, short of the $0.78 per share analysts predicted. To compare these results on a year over year basis, the company earned $279 million, or $0.67 per share in the second quarter of last year. Revenue tumbled to $6.07 billion, again short of the $6.26 billion analysts expected. Analysts will be looking at the comparable data for stores open at least a year, a key metric because it strips out the impact of newly opened and closed locations. Comparable revenues from these locations fell slightly by 0.8%.
The company announced it expects sales at stores open at least a year to climb between 2% and 2.9%, down from its previous guidance of a 3.5% increase. As a result earnings are now estimated at $3.80 to $3.90 per share, down from the previous outlook of $3.90 to $3.95 per share. Macy’s second quarter results start off a swing of retail earnings set to hit the wires over the coming weeks. Everything from the high end, to the low end, and everything in between will be reporting their highly anticipated results. It will be interesting to see if these results match Macy’s miss. Expect a number of analyst updates as a result of the lowered guidance.
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