Macy’s had better than expected fourth quarter profits that increased by 11%, said the U.S. retailer on Tuesday. However, the sales at the department store chain missed its targets as the severe weather kept many shoppers away.
Shares of Macy’s moved slightly lower during premarket trading on Wednesday following a report card of quarterly earnings that was mixed.
Macy’s announced that its earnings were $811 million or the equivalent of $2.16 a share during the fourth quarter, compared to $730 million in profit or $1.83 per share for the same period one year ago.
Revenue was down by 1.6% to end the quarter at $9.2 million, which trailed the views of Wall Street that were $9.27 billion. Sales at same-stores were up by 1.4% during the most recent quarter. Gross margins remained flat at 40.5%, compared two Wall Street estimates that were lower at 40.3%.
Macy’s also acknowledged that sales in January dropped by more than the company was bracing for due to the usually severe weather that hit most of the U.S. during January. The company announced that at one time or another 244 of its Bloomingdale’s or Macy’s stores had been closed due to severe winter weather during January.
Terry Lundgren the CEO at Macy’s said once the warmer weather of spring arrives and the full selection of spring merchandise is available, we believed the customers will come back to give the stores a more normalized flow of customers and shopping.
However, based upon experiences for January and into early February, business trends are being watched carefully.
Macy’s still reaffirmed a prior estimate from earnings per share for the full year of between $4.40 and $4.50, with growth in sales of same-stores reaching between 2.5% and 3%.
Shares of stock at Macy’s based in Cincinnati, Ohio dropped by 1.43% to $52.31 just prior to the opening bell on Wall Street on Wednesday.
