Macy’s Inc. (NYSE: M) reported its most recent quarterly results before the markets opened on Wednesday. The retailer said that it had $0.28 in earnings per share (EPS) and $5.55 billion in revenue, compared with consensus estimates that called for $0.45 in EPS and $5.55 billion in revenue. The fiscal second quarter of last year reportedly had $0.70 in EPS and $5.57 billion in revenue.
During the latest quarter, comparable sales growth was 0.2% on an owned basis and 0.3% on an owned plus licensed basis.
The retailer had a slow start to the quarter and finished below its expectations. Rising inventory levels became a challenge based on a combination of factors: a fashion miss in key women’s sportswear private brands, slow sell-through of warm weather apparel and the accelerated decline in international tourism.
While Macy’s had seasonal inventory challenges in spring, there are many areas of the business that performed well, notably its Destination Businesses. Also, the digital business posted its fortieth consecutive quarter of double-digit growth and mobile remained Macy’s fastest-growing channel.
Looking ahead to the 2019 fiscal full year, the company expects to see EPS in the range of $2.85 to $3.05 with comparable sales flat to up 1%. Consensus estimates call for $3.07 in EPS and $24.89 billion in revenue for the year.
Jeff Gennette, Macy’s board chair and chief executive, commented:
Our 2019 strategic initiatives are on track to contribute to sales growth in the back half of the year, and we have plans to drive productivity and improve gross margins. Our team has responded quickly to the external environment, course corrected when needed and we remain confident. Our 130,000 colleagues compete every day to win our customers’ business.
Shares of Macy’s closed Tuesday at $19.36, in a 52-week range of $18.86 to $39.30. The consensus price target is $23.00. Following the announcement, the stock was down nearly 13% at $16.90 in early trading indications Wednesday.