Macy’s saw improvement in its fiscal year 2018 and fourth quarter, while stepping up a restructuring plan that streamlines its upper management and reduces costs.
For the fourth quarter, Macy’s posted net income of $740 million, or $2.37 per diluted share, and adjusted net income of $850 million, or $2.73 per diluted share, versus company net income of $1.35 billion, $4.38 per diluted share, and adjusted net income of $876 million, $2.85 per diluted share, in the quarter a year earlier.
Macy’s topped a fourth quarter analyst consensus estimate of $2.53 per adjusted diluted share published by MarketBeat.
Comparable sales in owned stores gained 0.4%, while comps on an owned plus licensed basis gained 0.7%. Net sales were $8.46 billion versus $8.67 billion in the year-previous quarter.
For the full year, the company posted company net income of $1.11 billion, or $3.56 per diluted share, and adjusted net income of $1.3 billion, or $4.18 per diluted share, versus company net income of $1.57 billion, or $5.10 per diluted share, and adjusted net income of $1.16 billion, or $3.79 per diluted share, in fiscal 2017.
Comparable sales in owned stores gained 1.7% year over year, while comps on an owned plus licensed basis gained 2%. Net sales were $24.97 billion versus $24.94 billion in the fiscal year previous.
“2018 was an important year for Macy’s as we changed the trajectory of the company and delivered positive comparable sales for the full year,” said Jeff Gennette, Macy’s, chairman and CEO. “I’m pleased with the impact of our strategic initiatives, particularly as they gained traction in the back half of the year. Looking at the fourth quarter of 2018, while we delivered positive comparable sales against what was a strong holiday season in 2017, results were lower than our expectations. We experienced another quarter of double-digit growth in digital. We also saw continued improvement in our brick and mortar trends with the Growth50 stores outperforming the fleet.”
Gennette added, “In 2019, we will continue with a balanced investment approach, and we are confident that Macy’s is on the right path to deliver sustainable, profitable growth. The North Star Strategy is working. Macy’s is heading into 2019 a stronger business than we were a year ago, with healthier stores, a growing e-commerce business and a mobile experience that is resonating with our customers. We are executing a balanced investment strategy that supports all three of these components, with investment directed towards areas we know have the highest returns. We are also a more agile and flexible organization. The steps we are announcing to further streamline our management structure will allow us to move faster, reduce costs and be more responsive to changing customer expectations. Importantly, these changes build the foundation we need to achieve meaningful enterprise productivity improvements.”