The company's quarterly revenue was up 1.8% compared to the same quarter previous year. Two months ago, a Credit Suisse report indicated that Macy's isn't closing stores fast enough, suggesting that the department store would have to close 100 more locations to get back to pre-recession levels of sales productivity.
"It gave them more confidence to raise their overall sales forecast", Grom said, adding that, last year, global spending had declined by 3 percent to 5 percent in the first three quarters of the year and was down 2 percent during the holiday quarter. The company said it is ending a joint venture with China's Fung Retailing that began in 2015. Instead, Macy's will remain on Alibaba's (NYSE: BABA) TMall platform and focus efforts there. Its five top tourist markets are China, Canada, Mexico the United Kingdom and Brazil.
"Tax cuts, bonuses and good tax refunds have all been a windfall to consumers who have responded by increasing spending", said Neil Saunders, managing director of GlobalData Retail. (M) on Wednesday reported fiscal first-quarter earnings of $139 million. Earnings, adjusted for one-time gains and costs, were 48 cents per share.
The retailer's net sales increased 3.6 percent to $5.54 billion, beating analyst predictions. One research analyst has rated the stock with a sell rating, fourteen have given a hold rating, eight have given a buy rating and one has assigned a strong buy rating to the company's stock. Same-store sales increased 4.2% for the quarter.
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The quarter also benefited from a change in accounting that shifted its Friends & Family promotional programme from the second quarter to the first, the company said. The firm had revenue of $5.54 billion during the quarter, compared to analysts' expectations of $5.39 billion.
Bloomingdale's and Blue Mercury, the company's higher-end subsidiaries, are performing well, as is the off-price concept launched in a number of Macy's stores, called Backstage. Bank of New York Mellon Corp now owns 10,653,773 shares of the company's stock valued at $268,367,000 after buying an additional 2,328,072 shares during the last quarter. Finally, Morgan Stanley raised their price objective on shares of Macy's from $23.00 to $27.00 and gave the stock an "equal weight" rating in a research note on Wednesday, February 28th.
But the results from Macy's on Wednesday paint a better-than-expected picture, and the company said momentum will continue into the latter half of the year. Net operating cash flow jumped 36% to $322 million. And Macy's has been working on its 600-plus stores, testing out things like lockers where customers can pick up online orders and more clearly identifying service counters. "We are maintaining a healthy inventory position, which assisted us deliver improved gross margin", said Jeff Gennette, Macy's, Inc. chairman and chief executive officer.
Mackay Shields LLC bought a new position in Macy's Inc.