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Macy's Conference Call Highlights

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Macy's, Inc. (NYSE: M) reported its third quarter earnings on Wednesday. Shares of the company are up 5 percent.

Below are some key highlights from its conference call.

Financial Metrics:

• Sales in the quarter were $6.195 billion down 1.3% versus last year.
• And on a comparable basis, including license businesses, sales were down .7%. Excluding the License businesses, comp sales were down 1.4%.
• Bloomingdale's also fell below expectation for top line sales in the third quarter.
• The gross margin rate in the third quarter was flat to a year ago.
• Our merchandise margin was down a tenth and delivery expenses were higher than last year.
• But those factors were offset by the increase in the commissions earned on the sales of license businesses.
• We ended the quarter with inventory up approximately 1% versus last year.
• Credit income was $182 million, $12 million higher than last year. Usage of our proprietary cards increased 10 basis points over last year in the quarter, reaching 48.7%.
• Average diluted share count was 357.7 million shares or 6% below a year ago.
• Buy online/pickup in store. Same day delivery's available in eight markets, in eight big markets I might add. And it seems to be picking up. So again, we'll just have to see more as we get through Christmas but we're optimistic.

Guidance:

• Our EPS guidance for the year is now $4.25 to $4.35 on a diluted basis and this compares to our prior guidance of $4.40 to $4.50.
• This reduction is entirely due to the impact of the reduced sales performance in the third quarter and our assumption for the fourth quarter.
• This new guidance equates to fourth quarter EPS of approximately $2.30 to $2.40.
• We're not counting on a lot of help from the economy this holiday but every little bit will help.
• But as always, and as you've heard me describe, we have focused our energy and our resources on what we can control, which means executing a great game plan in the fourth quarter.
• The table is set and we are all well prepared to drive the business as we convert customer traffic to profitable sales.
• We are expecting a slight decline in merchandise margin, compounded by an increase in delivery expense, but we're hoping to be able to offset those factors again through the licensed income.

Posted-In: conference callEarnings News Guidance

 

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