Macy's Higher After Q1 Earnings Beat

Shares Macy's Inc M gained more than 3 percent early Wednesday after the retailer reported better-than-expected earnings in its first-quarter results.

What Happened

Macy's said it earned 44 cents per share in the first quarter on revenue of $5.504 billion versus expectations of 33 cents per share and $5.52 billion. Comparable sales grew 0.6 percent on an owned basis and were higher by 0.7 percent on an owned plus licensed basis. The company's digital business recorded another quarter of double-digit growth and mobile remains the fastest growing channel.

The company realized an asset sale gain of $43 million pre-tax ($31 million after-tax) compared to the same quarter last year where total asset gains were $24 million pre-tax.

The company entered into a new $1.5 billion, five-year Credit Agreement that replaces a prior $1.5 billion facility which was set to expire in 2021. The company said its "strong balance sheet" enabled it to extend the maturity of the agreement on similar terms.

Why It's Important

Macys' delivered its sixth consecutive quarter of comparable sales growth through an ongoing focus on growing the customer base and providing a "great experience" across all channels, Macy's CEO Jeff Gennette said in the press release.

Macy's reaffirmed its prior 2019 annual guidance, including comparable sales of flat to +1 percent, EPS of $3.05-$3.25, $100 million of asset sale gains and annual tax rate of 23 percent.

The stock traded around $22.56 per share, up 3.5 percent.

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