Wednesday, February 16, 2011

Macy's Inc.(NYSE: M): Q4 Earnings Preview 2010

Macy's Inc.(NYSE: M) is scheduled to release fourth-quarter earnings before the market open on Tuesday, February 22, 2011. Analysts, on average, expect the company to report earnings of $1.52 per share on revenue of $8.28 billion. In the year-ago period, the company reported earnings of $1.40 per share on revenue of $7.85 billion.

Macy's, Inc., through its subsidiaries, operates department stores in the United States. The company operates about 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's, as well as the and websites. The company also operates four Bloomingdale's outlet stores.

In the preceding third quarter, the Cincinnati, Ohio-based company's net income was $$10 million, or 2 cents a share, compared to a loss of $35 million, or 8 cents a share, in the prior-year quarter. On an adjusted basis, the company earned 8 cents a share in the latest quarter. Revenue climbed 6.6% to $5.62 billion from $5.28 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 3 cents per share on revenue of $5.55 billion.

Early in December, Macy's Inc. raised its fourth-quarter earnings guidance. Macy's said that it now expects earnings for the fourth quarter to be in a range of $1.44 per share to $1.49 per share, compared with previous guidance of $1.42 to $1.47 per share. This would result in full-year 2010 earnings of $1.96 to $2.01 per share, excluding expenses associated with the early retirement of debt, the company said. "On Black Friday alone, more than 4.5 million shoppers visited and, with a similarly high level of record traffic on CyberMonday," said Terry Lundgren, president and chief executive officer of Macy's, Inc.

Thanks to the improving consumer spending trend, robust holiday season and economic rebound, the department stores operator has been posting increase in same-store sale. Macy's reported a 2.6% increase in same-store sales for the the four weeks ended Jan. 30, 2010. For December, same-store sales were up 3.9% while same-store sales for the month of November rose 6.1%.

For the 13-week fourth quarter of fiscal 2010, Macy's, Inc.'s sales totaled $8.270 billion, up 5.4 percent from total sales of $7.849 billion for the final 13 weeks of 2009. On a same-store basis, the company's fourth quarter sales were up 4.3 percent. This is on the high end of the company's guidance for fourth quarter same-store sales to be up between 3.5 percent and 4.5 percent. 

The company is taking steps to increase sales, profitability and cash flows, which include integration of operations, consolidation of divisions, customer-centric localization initiatives, as well as development of e-commerce business and online order fulfillment centers. To help drive traffic Macy’s continues to focus on price optimization, inventory management and merchandise planning.

Last month, the company announced a series of organizational expansions, totaling approximately 725 new positions over the next two years, to support the growth of and In total, the company expects to add nearly 3,500 full-time, part-time and seasonal holiday associates in the next two years in relation to the growth of its online businesses. Online sales ( and combined) were up 27.2 percent in January, 29.1 percent in the fourth quarter and 28.7 percent for fiscal 2010. Online sales positively affected the company's same-store sales by 1.1 percentage points in the fourth quarter and 0.9 percentage points in fiscal 2010 as a whole.

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