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Macy's' Second Quarter Earnings Report
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Macy's (NYSE:M) announced its results for the second quarter on August 8, 2012. Macy's is a retailer that sells apparel and accessories, cosmetics, home furnishings and other consumer goods.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Surprising Earnings Results
The Numbers: Macy's' EPS outpaced analyst estimates while the company's revenues came in line with predictions. The company reported 68 cents per share versus the 66 cents per share estimate and revenues of $6.12 billion versus the $6.13 billion estimate. EPS rose 23.6% while revenue climbed 3% from the same period last year. Macy's' revenue has grown during each of the past four quarters on a year-over-year basis. Macy's reported net income of $279 million during the second quarter. This is 15.8% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.
Management Quote: "We were pleased with our spring season results, and they came on top of exceptionally strong spring season performances in each of the past two years. This indicates that our business continues to have forward momentum, even with challenges that include a soft economy, lower spending by international tourists, and temporary disruptions associated with the major remodeling of our Herald Square flagship store in New York City which was initiated in March," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "In response to these challenges, we have stayed very firmly focused on driving profitable sales growth while running the business with discipline to maintain margins and manage expenses."
A Look Back: Gross margins expanded last quarter, rising 0.1 percentage point to 41.9% from the year-earlier quarter. This breaks a streak of two consecutive quarters of shrinking margins.
Net income has increased more than threefold year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 1290% from the year-earlier quarter.
Looking Ahead: The outlook for the company's next-quarter performance is unfavorable. Estimates have gone down from an average 32 cents per share to 29 cents over the past seven days. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. Over the past three months, the average estimate for the fiscal year has climbed from $3.24 per to share to $3.39.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Surprising Earnings Results
The Numbers: Macy's' EPS outpaced analyst estimates while the company's revenues came in line with predictions. The company reported 68 cents per share versus the 66 cents per share estimate and revenues of $6.12 billion versus the $6.13 billion estimate. EPS rose 23.6% while revenue climbed 3% from the same period last year. Macy's' revenue has grown during each of the past four quarters on a year-over-year basis. Macy's reported net income of $279 million during the second quarter. This is 15.8% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.
Management Quote: "We were pleased with our spring season results, and they came on top of exceptionally strong spring season performances in each of the past two years. This indicates that our business continues to have forward momentum, even with challenges that include a soft economy, lower spending by international tourists, and temporary disruptions associated with the major remodeling of our Herald Square flagship store in New York City which was initiated in March," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "In response to these challenges, we have stayed very firmly focused on driving profitable sales growth while running the business with discipline to maintain margins and manage expenses."
A Look Back: Gross margins expanded last quarter, rising 0.1 percentage point to 41.9% from the year-earlier quarter. This breaks a streak of two consecutive quarters of shrinking margins.
Net income has increased more than threefold year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 1290% from the year-earlier quarter.
Looking Ahead: The outlook for the company's next-quarter performance is unfavorable. Estimates have gone down from an average 32 cents per share to 29 cents over the past seven days. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. Over the past three months, the average estimate for the fiscal year has climbed from $3.24 per to share to $3.39.
by
Investopedia Staff
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