- Macy’s beat on both the top and bottom lines, but reported a smaller-than-expected rise in same-store sales.
- The retailer announced a restructuring plan to streamline its management structure and improve its profitability.
- Shares were little changed after the results.
- Watch Macy’s trade live.
Macy’s reported better-than-expected sales and profits for the fourth quarter and announced a restructuring plan aimed at reducing costs and speeding up decision making. Shares were flat, trading near $US24.45 apiece.
The retailer posted adjusted earnings of $US2.73 a share – $US0.20 better than what analysts were expecting, according to Bloomberg data. It netted $US8.46 billion of revenue, edging out the $US8.45 billion that was anticipated.
However, same-store sales grew by 0.7% year-over-year on an owned plus licensed basis, missing the 0.9% increase that analysts were hoping for.
To improve its productivity and profitability, Macy’s launched a restructuring plan. It expected the move to generate annual expense savings of $US100 million starting in fiscal year 2019.
“The steps we are announcing to further streamline our management structure will allow us to move faster, reduce costs and be more responsive to changing customer expectation,” said CEO Jeff Gennette in a press release.
“Importantly, these changes build the foundation we need to achieve meaningful enterprise productivity improvements. These actions impact colleagues who have made strong contributions to the company over the years, and I thank them for their service.”
Looking ahead, the company sees full-year adjusted earnings in the range of $US3.05 to 3.25 a share, missing the Wall Street consensus of $US3.26.
Macy’s in January said it had disappointing holiday sales. The holiday season started off strong during Black Friday and Cyber Week, but weakened in the middle of December and did not return to expected patterns until the week of Christmas, Gennette said.
Macy’s was down 20% this year through Monday.
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