Macy's (M) Reports Nov/Dec. Comps Down 5.2%; Cuts FY15 Outlook
Macy’s, Inc. (NYSE: M) announced that its comparable sales on an owned plus licensed basis declined by 4.7 percent in the months of November and December 2015 combined, compared with the same period last year.
On an owned basis, comparable sales declined by 5.2 percent in the combined November/December period.
“The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry. In the November/December period, we were particularly disadvantaged by the historically warm weather in northern climate zones where both Macy’s and Bloomingdale’s are especially well-represented. About 80 percent of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods such as coats, sweaters, boots, hats, gloves and scarves. We also continued to feel the impact of lower spending by international tourists as the value of the dollar remained strong,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer.
“That said, we are buoyed by a very strong performance in our digital business, with continued double-digit increases in online sales. In November/December, we filled nearly 17 million online orders at macys.com and bloomingdales.com – a new record for our company and an increase of about 25 percent over last year – based on significant new fulfillment capacity, site functionality and aggressive digital marketing. This validates the strength of our omnichannel strategy and related investments which we made over the past decade and will continue into the future,” Lundgren said.
Please see the last page of this news release for important information regarding the calculation of the company’s comparable sales on an owned basis and comparable sales on an owned plus licensed basis.
Guidance
Macy’s, Inc. is not expecting a major change in sales trend in January and expects a comparable sales decline on an owned plus licensed basis in the fourth quarter of 2015 to approximate the 4.7 percent decline in November/December (from previous guidance of down between 2 percent and 3 percent for the fourth quarter). This calculates to guidance for comparable sales on an owned plus licensed basis in the full-year 2015 to decline by approximately 2.7 percent (from previous guidance of down 1.8 percent to 2.2 percent).
The decline in fourth quarter comparable sales on an owned basis is expected to be approximately 50 basis points greater than on an owned plus licensed basis.
Earnings per diluted share for the full-year 2015 now are expected in the range of $3.85 to $3.90, excluding expenses related to cost efficiencies announced today and asset impairment charges associated primarily with spring 2016 store closings. This compares with previous guidance in the range of $4.20 to $4.30. Updated annual guidance calculates to guidance for fourth quarter earnings of $2.18 to $2.23 per diluted share, excluding charges associated with cost efficiencies and store closings. This compares with previous guidance for earnings per diluted share of $2.54 to $2.64 in the fourth quarter. Earnings guidance for 2015 includes an expected $250 million gain on the sale of real estate in downtown Brooklyn.
*** The Street sees FY15 EPS of $4.24 and Q4 EPS of $2.53.
Fourth Quarter Announcement
Macy’s, Inc. is scheduled to report fourth quarter sales and earnings on Tuesday, Feb. 23, 2016. Additional detail on financial performance will be provided at that time. The company will webcast a call with financial analysts and investors at 9 a.m. ET on Feb. 23. Macy’s, Inc.’s webcast is accessible to the media and general public via the company's website at www.macysinc.com. Analysts and investors may call in on 1-888-806-6224, passcode 9176608. A replay of the conference call can be accessed on the website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call.