Department store chain Macy’s Inc. (M) on Thursday reported a surge in profit for the second quarter from last year as a decline in sales was more than offset by lower expenses and one-time charges.
Both revenue and adjusted earnings per share beat analysts’ estimates. Looking ahead, the company reiterated its financial outlook for fiscal 2017.
The company’s second-quarter net income was $116 million or $0.38 per share, up sharply from $11 million or $0.03 per share in the prior-year quarter.
The latest quarter’s results include non-cash retirement plan settlement charges as well as net premiums and fees associated with debt repurchases. The prior-year quarter’s results include asset impairment and other charges.
Excluding these items, adjusted earnings for the quarter were $0.48 per share, compared to $0.54 per share last year. On average, analysts polled by Thomson Reuters expected earnings of $0.46 per share. Analysts’ estimates typically exclude special items.
Net sales for the quarter declined 5.4 percent to $5.55 billion from $5.87 billion in the year-ago period, but beat analysts’ consensus estimate of $5.52 billion.
The decline in total sales reflects, in part, the closure of stores previously announced by the company.
Comparable sales growth, on an owned plus licensed basis, declined 2.5 percent. On an owned basis, comparable sales were down 2.8 percent.
Selling, general and administrative expenses for the quarter declined to $1.93 billion from $2.03 billion last year.
Looking ahead, Macy’s reaffirmed its outlook for full-year adjusted earnings per share of between $3.37 and $3.62, excluding the impact of the anticipated settlement charges related to defined benefit plans and premiums and fees associated with debt repurchases.
Excluding the impact of the anticipated fourth-quarter gain on the sale of the Union Square Men’s building in San Francisco and the anticipated settlement charges, adjusted earnings per share of $2.90 to $3.15 are expected in 2017.
Macy’s also reaffirmed its outlook for full-year comparable sales on an owned basis to decline between 2.2 percent and 3.3 percent, with comparable sales on an owned plus licensed basis to decline between 2.0 percent and 3.0 percent.
Total sales for the year are expected to be down between 3.2 percent and 4.3 percent.
The Street expects earnings of $3.29 per share for the year on revenues of $24.67 billion.
by RTT Staff Writer
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