By Siyuan Du
Macy’s Inc. reported quarterly earnings and revenue that were below Wall Street expectations as the retailer coped with bad winter weather, the West Coast port slowdown and weak tourist spending.
The company earned $193 million, or 56 cents per diluted share, in the three months ended May 2, compared with $224 million, or 60 cents per diluted share, in the year-earlier quarter. The results fell 6 cents short of the analysts’ consensus estimate of 62 cents, according to Bloomberg LP.
Sales in the quarter fell 0.7 percent to $6.23 billion, below the $6.31 billion that analysts expected. Comparable sales at stores open for more than a year fell 0.1 percent.
“The weather was bad, and the strong dollar makes tourists spend less. So whether it’s Canada, China or Europe, tourists’ visits are down and the spending per visit is down,” said Paul Swinand, an analyst at Morningstar Inc. “But that will normalize over time. The question is from the base that we have now, can they really increase sales and earnings.”
Macy’s board of directors boosted the company’s share repurchase authorization by $1.5 billion and increased the quarterly dividend to 36 cents per share from the current 31.25 cents per share. It was the fifth increase in the dividend in the past four years.
The retailer said it’s working on a series of initiatives, including four off-price pilot stores in N.Y. slated to open in the fall to compete against successful lower-priced retailers, such as TJX Companies and Ross Stores.
“Fortunately, most of these short-term issues are largely behind us,” said Terry J. Lundgren, chairman and chief executive officer of Macy’s. “Looking ahead, we have many reasons to be encouraged about the growth prospects for our business.”
For the full fiscal year, the company reaffirmed that it expects sales growth of approximately 1 percent and comparable sales growth of approximately 2 percent. The company also reiterated its guidance for full-year earnings of between $4.70 to $4.80 per diluted share, compared with earnings of $4.22 per diluted share in fiscal 2014.
Macy’s shares fell $1.60, or 2.45 percent, to close at $63.73.