Macy’s Inc. (NYSE: M) – Q1 FY 2011 Earnings Preview
Tuesday, May 10, 2011 1:20 PM

Macy's Inc. (NYSE: M), one of the largest clothing retailer in U.S., is scheduled to report its first quarter FY 2011 financial results on May 11. For the month of April, Macy's reported a 10.8 percent increase in same-store sales, beating analysts' estimate of 5.3 percent. Macy's total sales for April were $1.92 billion, compared with total sales of $1.73 billion in the month of April 2010. For the month of February and March, Macy's reported an increase of 5.8 percent and 0.9 percent, respectively, in same store sales. In the last four quarters, the company's reported EPS exceeded analysts' consensus estimate by margins in the range of 3.30 percent to 80 percent.

For Q4 FY 2010:

  • Macy's reported total sales of $8.2 billion, up 5.4 percent, compared with sales of $7.8 million in the same quarter last year.
  • Operating income totaled $1.144 billion, or 13.8 percent of sales, compared with operating income of $874 million or 11.1 percent of sales for the same fiscal 2009 period.
  • Macy's net income was $667 million, up 50 percent, compared with net income of $445 million in the same quarter last fiscal year.
  • Earnings were $1.55 per diluted share, representing an increase of 48 percent, compared with $1.05 per diluted share in the fourth quarter FY 2009.

For full year 2010, Macy's sales totaled $25 billion, up 6.4 percent, from total sales of $23.5 billion in FY 2009. Operating income totaled $1.894 billion, or 7.6 percent of sales, compared with operating income of $1.063 billion, or 4.5 percent of sales for fiscal 2009. For the year, Macy's reported diluted earnings per share of $1.98. Operating income totaled $1.894 billion, or 7.6 percent of sales, compared with operating income of $1.063 billion or, 4.5 percent of sales, for fiscal 2009.

Company Outlook

The company is assuming same-store sales growth of approximately 3 percent in fiscal 2011. Guidance for earnings per diluted share in fiscal 2011 is $2.25 to $2.30. Capital expenditures for the year are expected to be approximately $800 million.

Analysts Forecast

For the first quarter, analysts' EPS estimates range from a low of $0.14 to a high of $0.20 per share, compared with a consensus estimate of $0.17 per share to $0.09 per share in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $5.68 billion to a high of $5.86 billion, compared with a consensus estimate of $5.57 billion to $5.81 billion in the same quarter a year ago. For the first quarter, the consensus EPS forecast has increased from $0.14 per share estimated 30 days ago to the current estimate of $0.17 per share. Macy's last trading price was $26.35, up 0.95 points, or 3.74 percent on May 5. On May 3, 2011, Moody's Investors Service upgraded its rating outlook for Macy's Inc. as the retailer cut its financial risks and improved its performance. Moody's upgraded the stock rating to Positive from Stable.



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