Market Overview

Macy's Q1 2014 Earnings Preview


On May 14 at 8:00 am EST, Macy’s (NYSE: M) is expected to release Q1 2014 earnings.

Data from the Benzinga Pro Calendar shows estimates for Q1 are $0.60 on $6.47 billion in revenues.

In a note on May 12, Paul Trussell of Deutsche Bank reiterated a Buy rating accompanied by a price target of $68.00 along with a reiteration of an EPS estimate for Q1 at $0.58.

Macy’s closed Tuesday at $57.84.

Aside from the downward revisions of Q1 2014 earnings estimates, Macy’s has been leading peers in Gross Margins.

This doesn’t lend us much to work with given estimates for Q1’s EPS number have dropped 7.81 percent since February of this year:

Same Store Sales (SSS) will be heavily depressed this quarter according to Deutsche Bank.

Trussell cut his year-on-year SSS estimate by 50 percent to account for weather and also Macy’s timing of its Friends & Family sale, which was only four days in Q1 this year compared with seven days in Q1 2013.

The recent price correction has offered the market an opportunity to breathe and reevaluate the atmosphere surrounding Macy's and the retail clothing industry.

The momentum of this bull-run has started to become less enthusiastic over the past few weeks:


Macy's will not require much of a surprise on May 14 to garner the boost required to push it above $60. 

The recent past has fared well for Macy's compared with their peers when it comes to recording postive EPS surprises:

With the EPS expectations bar lowered and Macy's past eight quarters of profitability, Wednesday release should be easy sailing for the firm as now less will be required to keep the Macy's bulls buying. 

As summer buying picks up and JC Penney works to revive itself, Macy's shouldn't have a problem increasing its own market share if they can continue draw benefits from e-commerce and thus side-step these weather related setbacks. 

Posted-In: Deutsche Bank jc penney Paul TrussellAnalyst Color Previews Pre-Market Outlook Trading Ideas


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