Market Overview

Highlights From Macy's Q1 2014 Earnings Conference Call

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Macy's (NYSE: M) CFO Karen Hoguet carried an optimistic tone in the company's Q1 2014 conference call on Wednesday following the earlier release of the Q1 earnings report.

Hoguet began the call by providing a brief overview of Macy's Q1 results then launched into an extended Q&A session.

Financial Results and Guidance

  • 2014 comp sales guidance 2.5-3 percent
  • 2014 EPS guidance $4.40-$4.50
  • The Macy's board approved a 25 percent increase dividends to 1.25 per share on an annual basis
  • $1.5 billion increase in buy back authorization to $2.5 billion
  • Q1 Sales $6.3 billion down 1.7 percent
  • Comp sales were down 1.6 percent and on an own-plus-license basis, comp sales were down 0.8 percent versus last year. Looking at owned plus license comp is the right way to be measuring customer spending with the company compared to +4 percent last year
  • Gross margin up 38.9 percent, merchandise margin up approximately the same amount
  • SG&A expenses were $2 billion which is 2 percent less than last year. This decrease was driven by, 1.) retirement expense favorable over last year by $39 million 2.) benefits cost reduction initiatives 3.) credit was $5 million better than last year 4.) flexing of expense in sales variable areas 5.) timing shifts in marketing

Company Direction

  • Hoguet commented, "We love our private brands and we love our national brands, as well. And so, we will continue to build our business with both."
  • Hoguet does not see investments in the tech side of the business going down over the year and commented that the company will continue to invest "quite heavily".
  • Despite the company's stronger performance over the harsh winter season, Hoguet does not believe 2014 guidance is overly conservative.

Posted-In: Karen HoguetEarnings News Guidance


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