Macy’s Inc (NYSE: M) is having an overwhelmingly strong day in the market today, and for good reason. The company released its financial results for the fourth quarter, proving that the company has broken its sales slump. Of course, the news proved to be exciting, leading to some big gains in the value of the stock. Today, we’ll talk about what we saw from the report, what we’re seeing from M shares as a result, and what we’ll be watching for ahead.
M Reports Strong Q4 Results
As mentioned above, Macy’s reported its earnings for the fourth quarter, beating expectations. Here’s what we saw from the report:
- Earnings Per Share – When it comes to earnings, M definitely did not disappoint. During the quarter, analysts expected that the company would generate earnings in the amount of $2.69 per share. However, the company blew that figure away, generating earnings in the amount of $2.82 per share.
- Revenue – Revenue came in just about in line with analyst expectations at $8.67 billion.
- Guidance – For the full year, M said that it is expecting for earnings to come in between $3.55 per share and $3.75 per share. That’s well ahead of analysts expectations of full year earnings at $3.05 per share.
- Same Store Sales – While everything above is good news, the data that really has investors excited is same store sales. During the quarter, Macy’s said that sales at established stores rose by 1.4%. This growth included sales in licensed departments like jewelry. Ultimately, this figure was well above expectations. In fact, analysts only expected this figure to increase by 0.4%.
In a statement, Jeff Gennette, Chairman and CEO at M, had the following to offer:
We are committed to returning Macy’s, Inc. to comparable sales growth in 2018 and will build on the momentum we created in the fourth quarter of 2017. Macy’s, Inc. had a solid fourth quarter, including strong performance in January, and the full year exceeded our expectations for annual comparable sales and adjusted earnings per diluted share. We are encouraged to see a trend improvement in our brick & mortar business, and we had the 34th consecutive quarter of double-digit growth in our digital business… Consumer spending was strong in the fourth quarter, and we were ready with improved execution and great products across all categories. We were disciplined with our promotional cadence and maintained a good inventory position. We head into 2018 with an improved base business healthy inventories, a focused and engaged organization and a clear path to return Macy’s to growth.
What We’re Seeing From The Stock
As investors, we tend to fall in love with earnings season. After all, earnings season is when we get the most updated financial and performance data out of the companies that we’re interested in. So, with such a strong report out of Macy’s, it’s no surprise to see that the stock is making a run for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:11), M is trading at $30.58 per share after a gain of $3.15 per share or 11.48% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on M. In particular, we’re interested in following the future financial reports to see if the growth we saw in the fourth quarter becomes a trend for the company. We’re interested in sales on both sides of the spectrum, continued impressive growth on the digital side, and hopefully a continuation of growth on the brick and mortar side. Nonetheless, we’ll keep following the story closely and bringing the news to you as it breaks!
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