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NEW YORK, United States — Macy's Inc., the largest U.S. department-store chain, posted a 23 percent gain in net income last quarter after the company cut expenses, helping it weather disappointing sales.
Net income rose to $217 million, or 61 cents a share, from $177 million, or 47 cents, a year earlier, the Cincinnati-based company said today in a statement. Selling, general and administrative expenses shrank to about $2 billion in the period, which ended Nov. 1, compared with $2.1 billion a year earlier.
“Sales did not live up to our expectations in the quarter,” Chief Executive Officer Terry Lundgren said in the statement. “However, we were able to maintain gross margin flat to last year and reduced SG&A expense.”
While earnings grew last quarter, the company lowered its projections for the year. Profit will be $4.25 to $4.35 a share, down from a previous forecast for as much as $4.50 a share. Analysts estimated $4.40 on average, according to data compiled by Bloomberg.
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The shares rose as much as 2.6 percent to $60.12 after the results were released. The stock had gained 9.7 percent this year through yesterday.
Lundgren, 62, is coping with sluggish retail spending and a shift toward e-commerce, putting pressure on the company ahead of the all-important holiday season. In a bid to entice more shoppers this year, Macy’s plans to open stores at 6 p.m. on Thanksgiving day, two hours earlier than it did in 2013.
Comparable Sales
Third-quarter sales at stores open at least a year declined 1.4 percent, missing the projection for a 1.9 percent increase compiled by Consensus Metrix.
Lundgren said he was optimistic about the fourth quarter, partly because of the company’s product assortment and new online capabilities.
“It’s all about what they’re looking for for the fourth quarter, especially the holiday season -- what are the inventory levels coming into the holiday, and how much are they going to need to discount to drive sales,” Rob Plaza, a Cleveland-based analyst at Key Private Bank, said in an interview before the results were released.
By Lindsey Rupp; editors: Nick Turner, John Lear.
