Macy’s (M) posted better-than-expected third quarter results on Wednesday while offering a cautious outlook for the holiday quarter.
The retailer said net sales for the fourth quarter are expected to fall 3%-5% from a year ago to a range of $7.35 billion-$7.5 billion.
In the third quarter, Macy’s posted revenue of $4.7 billion, in line with last year and slightly more than Wall Street’s estimates of $4.6 billion, per Bloomberg consensus data. That’s alongside adjusted earnings per share of $0.04, better than the $0.14 loss analysts were expecting.
Same-store sales grew 2.5%, ahead of the 0.6% increase that was expected. This marked the fastest pace of same-store sales growth in 13 quarters.
Macy’s stock was down about 0.4% on Wednesday following the results.
“We don’t make commitments lightly, and so that doesn’t set a ceiling on how aggressive and how ambitious our team is,” Macy’s CEO Tony Spring said Wednesday about the company’s guidance for the fourth quarter.
“But the last thing I want to do is, after three straight quarters of beating the Street, and two straight quarters of comp growth, get into a situation where we get ahead of our skis,” Spring added. “[That would] really [dilute] the credibility that we’re building with the investment.”
Macy’s revealed its Bold New Chapter Strategy in early 2024.
Read more: Live coverage of corporate earnings
The company also raised its annual outlook on Wednesday, saying it expects full-year same-store sales to fall in a range between unchanged and up 1%. Macy’s previously said it expected sales to fall up to 1.5% for the year.
Adjusted earnings per share are also expected to come in between $2.00 and $2.20, up from a range of $1.70-$2.05 previously.
In the third quarter, its cosmetics brand, Blue Mercury, posted a 1.1% sales increase, while Bloomingdale’s saw an 8.8% increase in same-store sales, also marking the highest growth in 13 quarters.
Spring said the luxury business is “hitting on all strides right now” with its assortment, marketing, store portfolio, and “very healthy digital business.”
“The K-shaped economy helps,” Spring said. “Bloomingdale’s is in the zeitgeist of the way the modern affluent shopper wants to shop.”
At the stores the company plans to keep open across its portfolio, same-store sales increased 3.4% in the third quarter. Macy’s plans to close 150 stores over a three-year period; it closed 64 last year.
A customer exits the Macy’s flagship department store in midtown Manhattan in New York City, U.S., December 11, 2023. REUTERS/Brendan McDermid · Reuters / Reuters
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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