Macy's: Why This Retailer Is Under Extreme Pressure
Estimize | Aug 12, 2015 01:20AM ET
Macy`s Inc (NYSE:M) is scheduled to report its fiscal second-quarter earnings on Wednesday, Aug. 12 before the stock market opens. Estimize analysts are predicting EPS of $0.77, two cents above the Wall Street consensus. Last quarter, Macy’s had EPS of $0.56, down 7% YoY. Estimize is also predicting higher revenues than Wall Street at $6.261B vs. $6.255B. Last quarter, revenue was $6.232B, down 1% YoY. After last quarter’s earnings, Macy’s Chairman and Chief Executive Terry Lundgren claimed the company fell short due to severe weather and the slowdown in West Coast ports. However, he was optimistic about the future, predicting that certain categories such as dresses and “active categories” as well as the new Plenti loyalty program would show positive results in the future. Moreover, the acquisition of luxury beauty and spa retail chain, BlueMercury, is also expected to boost earnings this quarter. Lastly, Macy’s has a lot of valuable real estate under their belt, owning several properties across the country. Macy’s will look to monetize these properties in an appropriate manner to increase assets.
Although Lundgren ended the first-quarter conference call on an upbeat note, stating the future would be more positive due to several new initiatives, there are other issues that could negatively impact the upcoming earnings results. Some of these factors include a decrease in tourism sales, lower handbag sales– which the firm calls the “Kors effect” referring to the Michael Kors' (NYSE:KORS) handbags– and changing customer trends. Moreover, Macy’s aggressive pricing to fend off competition could too weigh on margins in the upcoming quarter.
So will Lundgren’s optimism be verified tomorrow morning, or will the several negative influences be too strong to overcome? It is hard to say. Macy’s is kicking off the second quarter earnings season for department stores, and the results will not only be telling for the future of the company, but for the retail industry as a whole.
Get The News You Want
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.