Macy's Shakes Up the Shopping Scene
Strong Growth and Raised Outlook
Macy's has been on a roll, beating sales predictions for the third quarter in a row. This is the best growth they've seen in over three years. The company is feeling confident and has even raised its full-year sales and earnings outlook.
- Earnings Outlook: Now expects to make between $2 and $2.20 per share, up from their previous estimate of $1.70 to $2.05.
- Sales Outlook: Expectations now between $21.48 billion and $21.63 billion.
Challenges Ahead
But it's not all smooth sailing. Macy's expects some challenges ahead, like consumers being picky with their spending and higher tariffs. Even so, they're planning for a flat to 0.5% growth in comparable sales, which is better than their previous forecast of a decline.
Market Reaction and CEO's Optimism
- Shares: Took a dip of about 6% in early trading.
- CEO Tony Spring: Remains optimistic. He says Macy's has an edge during the holiday season because of its wide range of merchandise and price points.
The company is also investing more in:
- Staffing
- Better products
- Eye-catching displays to attract shoppers
Third Quarter Performance
- Net Income: Fell to $11 million, but when adjusted for one-time items, they made 9 cents per share.
- Revenue: Took a slight dip.
- Comparable Sales: Across the company rose by 3.2%, with Bloomingdale's leading the pack at a 9% increase.
Improvements and Future Outlook
Spring credits the improvements to changes made in Macy's stores, like adding more staff and introducing new brands. He's also pleased with how the stores look and feel, saying they're "crisp, clean, and interesting." Cooler weather also helped boost sales of items like sweaters and boots.
Looking ahead to the holiday season, Spring expects promotions to be similar to last year, but higher tariffs might mean higher prices for some items. Despite this, Macy's shares have risen about 34% so far this year, outpacing the S&P 500's 16% gain.
