Macy's Misses Q2 Expectations

Macy's, Inc. M reported weaker-than-expected results for the second quarter on Wednesday. The Cincinnati, Ohio-based company posted quarterly net income of $217 million, or $0.64 per share, compared to $292 million, or $0.80 per share, in the year-ago period. Its sales slipped 2.6 percent to $6.1 billion. However, analysts were expecting earnings of $0.76 per share on revenue of $6.23 billion. The average estimate among 32 Estimize users was for earnings of $0.76 per share and revenue of $6.26 billion. Its comparable sales on an owned plus licensed basis shrank 1.5 percent for the quarter. On an owned basis, Macy's comparable sales dropped 2.1 percent in the quarter. Its operating income dropped to $436 million from $571 million. During the quarter, Macy's repurchased around 8.0 million shares of its common stock for a total of around $552 million. "We are disappointed in our second quarter results, which were impacted by a variety of factors, both internal to the company and in the macroeconomic environment. We expect an improvement in trend beginning in the second half of 2015 based on a range of promising new strategic initiatives, including those initially announced in January, which we believe will transform our company in the years ahead," said Terry J. Lundgren, Macy's chairman and chief executive officer. Macy's now projects FY15 same-store sales on an owned plus licensed basis to be almost flat from last year, versus its earlier forecast for around 2 percent growth. The company affirmed its 2015 earnings guidance of $4.70 to $4.80 per share. Macy's also reported the formation of a joint venture with Hong Kong-based Fung Retailing Limited to test e-commerce in China. Macy's shares fell 1.21 percent to $66.71 in pre-market trading.