Macy’s, Inc. (NYSE: M) experienced a remarkable rally on Friday, with its shares surging by 12.2%, defying the struggling retailer’s decision to slash its full-year profit forecast. The company attributed the downward revision to “weakened demand trends” expected during the summer months.
Macy’s Slashes Forecast
Macy’s, Inc. (M) reported a 48% drop in adjusted earnings, amounting to 56 cents per share. In addition, the company experienced a 7% decline in sales, totaling $4.98 billion for the first quarter. These results, released on Thursday, fell short of expectations set by FactSet analysts who predicted earnings of 45 cents per share on $5.013 billion in sales.
Comparable sales for the period also saw a decline of 7.2%, surpassing analyst forecasts for a 5.5% decrease.
Although Macy’s exceeded Wall Street estimates, the company remains cautious about the future. It has revised its full-year outlook, expecting the macroeconomic conditions for consumers to worsen. Macy’s expects net sales for the year to range from $22.8 billion to $23.2 billion, down from its previous forecast of $23.7 billion to $24.2 billion.
In addition, Macy’s has adjusted its earnings outlook to $2.70 to $3.20 per share, down from the previous range of $3.67 to $4.11 per share.
FactSet predicts that full-year earnings will reach $3.69 per share with sales totaling $23.73 billion.
Following the announcement, Macy’s shares initially dropped 3% in early trading but later rebounded, gaining 1.2% on Thursday. However, in premarket trading, shares fell by as much as 10%. Overall, Macy’s stock has experienced a significant decline of 25% year to date.
Zabih Ullah is a seasoned finance writer with more than ten years of experience. He is highly skilled at analyzing market trends, decoding economic data, and providing insightful commentary on various financial topics. Driven by his curiosity, Zabih stays updated with the latest developments in the finance industry, ensuring that his readers receive timely and relevant news and analysis.
