By Senad Karaahmetovic
Shares of Macy’s (NYSE:M) are trading nearly 10% higher in pre-open Thursday after the company reported better-than-expected Q4 results and offered upbeat profit guidance.
Macy’s reported EPS of $1.88 on revenue of $8.3 billion, beating the average analyst estimate for a profit of $1.58 per share on revenue of $8.22B. Overall sales fell 4.6% year-over-year while inventory decreased by 2.6% to $4.27B. Comparable sales for the quarter fell by 3.3%.
“We successfully navigated 2022 from a position of financial and operational strength. Despite an increasingly volatile macroeconomic climate, through the ongoing execution of our Polaris strategy, we remained agile, pivoted to meet customer demand and elevated our approach to inventory management,” said Jeff Gennette, chairman and chief executive officer of Macy’s.
For the full of 2023, Macy’s sees EPS at $3.89 at the midpoint of its guidance, topping the consensus for earnings of $3.84 per share. Net sales are seen in the range of $23.7-24.2B, below the $24.29B consensus. Overall, sales are expected to fall 1-3% YoY.
The company “anticipates that the heightened level of uncertainty within the macroeconomic environment will continue in 2023.” As a result, it is “taking a prudent approach to its outlook, which reflects the potential differences in the severity and duration of macroeconomic headwinds, offset by how the business can respond.”
Vital Knowledge analysts described the company’s execution as one of the best in the retail sector.
Macy’s is “focusing on what they can control (costs, inventory mgmt., etc.), resulting in EPS above plan and guidance for 2023 that is quite impressive considering the circumstances. If people likes TGT and KSS, they should love Macy’s (especially with a PE and EV/EBITDA multiple of ~5x),” they said.