Macy’s raised its outlook for the fiscal year after a solid first quarter, signaling that the retailer’s growth strategies seem to be taking hold after several downbeat quarters.
In the first quarter ended May 5, Macy’s recorded company net income of $139 million, or 45 cents per diluted share, versus $78 million, or 26 cents per diluted share, in the year-before period.
With proceeds from asset sales excluded, company earnings per diluted share were 42 cents versus 12 cents in the first quarter of 2017. Macy’s topped a MarketBeat-published analyst average adjusted diluted earnings per share estimate of 35 cents.
Comparable sales on an owned basis gained 3.9% and advanced 4.2% on an owned-plus-licensed basis versus the quarter a year prior. Net sales were $5.54 billion versus $5.35 billion in the year-previous quarter. Operating income was $238 million as compared to $219 million in the period a year earlier.
“Macy’s, Inc.’s results for the first quarter of 2018 reflect continuing momentum in the business,” said Jeff Gennette, Macy’s chairman and CEO. “We exceeded our expectations and saw strong performance across all three brands— Macy’s, Bloomingdale’s, and Bluemercury— as well as across all geographic regions and families of business. We are maintaining a healthy inventory position, which helped us deliver improved gross margin. The winning formula for Macy’s is a healthy brick and mortar business, robust e-commerce and a great mobile experience. While we have more work to do, the continuing improvement in our stores is encouraging, and we once again achieved double-digit growth in the digital business. Our best customer is responding well to the improvements we’ve made to her experience in our stores, on dotcom and through the Macy’s app.”
Gennette added that the company performance in the first quarter “reflects solid execution of our North Star Strategy, including merchandising and marketing activities. We also saw continued healthy consumer spending and significant improvements in international tourism. Taken together, these positive factors give us confidence to raise both our sales and earnings guidance for the fiscal year. Heading into the second quarter, we are intensely focused on laying the foundation for our 2018 strategic initiatives to support improved performance in the back half of the year.”