Macy’s said it had a slow start to the second quarter, as it missed a Wall Street profits estimate and lowered its full year earnings guidance to $2.85 to $3.05 from $3.05 to $3.25 per diluted share.
Year over year, the company’s net earnings fell to $86 million, or 28 cents per diluted share, versus $166 million, or 53 cents per diluted share, in the previous second quarter. Adjusted company net income, excluding one-time charges, was $88 million, or 28 cents per diluted share, versus $219 million, or 70 cents per diluted share, in the quarter a year past.
Macy’s missed a MarketBeat-published analyst consensus estimate by 17 cents per diluted share.
Comparable sales gained 0.2% in owned stores and 0.3% in owned-plus-licensed stores in the quarter year over year. Net sales were $5.55 billion versus $5.57 billion in the quarter a year earlier. Operating income came in at $155 million versus $303 million in the quarter a year prior.
“Macy’s, Inc. delivered another quarter of comparable sales growth,” said Jeff Gennette, Macy’s chairman and CEO. “That said, we had a slow start to the quarter and finished below our expectations. Rising inventory levels became a challenge based on a combination of factors: a fashion miss in our key women’s sportswear private brands, slow sell-through of warm weather apparel and the accelerated decline in international tourism. We took markdowns to clear the excess spring inventory and are entering the fall season with the right inventory to meet anticipated customer demand, While we had seasonal inventory challenges in spring, there are many areas of the business that are performing well, notably our Destination businesses. We continue to see healthier sales within our brick and mortar business, led by our Growth50 stores and Backstage expansion. Our digital business posted its fortieth consecutive quarter of double-digit growth, and mobile remained our fastest growing channel.”