Macy’s Inc. (NYSE: M) shares jumped 6.6% in Wednesday premarket trading after the department store retailer reported first-quarter profit that blew past estimates.
It is reported that for 2019, Macy’s expects adjusted EPS of USD 3.05 to USD 3.25, sales to be approximately flat, and same-store sales on both an owned and owned-plus-licensed basis to be flat to up 1%. FactSet is guiding for EPS of USD 3.10, sales of USD 25.09 Billion, compared with USD 24.97 Billion last year, and same-store sales growth of 0.4%.
Today the department store chain continues to face many of the same challenges impacting all retailers. Last year, its sales fell because it’s hard to attract customers when they are getting used to shopping at online platforms such as Stitch Fix (NASDAQ: SFIX) and Rent the Runway.
According to CEO Jeff Gennette, e-commerce revenues grew at a double-digit percentage rate during the quarter, while mobile remained Macy’s fastest-growing channel for sales growth.
He also mentioned that the timing of Easter, which fell later in the season this year than last, hurt sales, as did the colder, wetter weather that has blanketed much of the country this spring.
On the contrary, Macy’s is doing especially well with its most loyal shoppers, the CEO added. Transaction growth of 5.7% during the quarter was driven by Macy’s most loyal customers “shopping more frequently than ever.”
“We believe the biggest department store sector vulnerability remains women’s apparel — and specifically the need to better attract and retain new millennial and Generation Z customers,” Cowen & Co.’s retail analysts said in a research note ahead of earnings.