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Macy’s Quarterly Profit, Sales Beat Estimates on Holiday Lift

Analysts and investors were expecting a sharper drop after a previous profit warning.

Image: Flagship store, Herald Square, New York. Source: Macy’s.

(Reuters) – Department store chain Macy’s Inc on Tuesday reported quarterly comparable sales and profit that beat Wall Street estimates with the help of an uptick in holiday sales, sending shares up 4% before the bell.

The U.S. retailer reported a small decline in holiday same-store sales in January, surprising investors who were bracing for a sharper drop after a profit warning citing weak international tourism and sluggish mall traffic.

“We executed well during the Holiday 2019 season,” Chief Executive Officer Jeff Gennette said in a statement.

“We were pleased with the significant trend improvement in the fourth quarter, including a meaningful sales uptick in the 10 shopping days before Christmas.”

The entire year, however, did not play out as intended, Gennette added.

Earlier this month, Macy’s said it would close 125 stores, including those based in shopping malls, and explore new off-mall formats as a part of its strategy to cut costs and boost growth. The retailer also cut jobs and is closing several offices.

Excluding one-time items, the company earned $2.12 per share, beating the average estimate of $1.96.

Net sales fell 1.4% to $8.34 billion, but was a touch above analysts’ estimate of $8.32 billion.

Comparable sales at Macy’s owned and licensed stores fell 0.5% in the fourth quarter ended Feb. 1, compared with the 0.93% fall estimated by analysts, according to IBES data from Refinitiv.

Net income attributable to the company fell to $340 million, or $1.09 per share, from $740 million, or $2.37 per share, a year earlier.

Reporting by Nivedita Balu in Bengaluru; editing by Tomasz Janowski.


Source: Reuters

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