A shift, albeit a late one, to colder temperatures in January helped Macy’s Inc. exit Q4 with better than expected sales and profit, the company said Tuesday.
The Cincinnati-based department store chain said its reported net income in the fourth quarter totaled $544 million, or $1.73 per diluted share, a 31 percent decline from the comparable quarter when earnings totaled $793 million, or $2.26 per diluted share. Adjusted diluted EPS of $2.09, however, beat market watchers’ estimates for EPS of $1.89.
Fourth quarter revenue, at $8.87 billion, also decreased 5.3 percent year-over-year but was better than feared. Market watchers expected Q4 sales of $8.83 billion.
“While 2015 was challenging, our sales trend improved in January as the weather turned colder in northern climate zones and Macy’s and Bloomingdale’s were well-stocked in coats, boots, sweaters, gloves, hats and other seasonal goods,” Macy’s Chairman and CEO Terry Lundgren said in a release. “…We are encouraged by the way the business responded going into 2016, and we believe we are well positioned to stabilize sales levels this year as we lay the foundation for enhanced shareholder value and sustained, long-term profitable growth.”
Lundgren also noted that inventories, up by 0.7 percent on a comp basis, “were in good shape.”
For the full-year, Macy’s said its total sales declined 3.7 percent, to $27.1 billion, while comp sales on an owned plus licensed declined by 2.5 percent. On an owned basis, full-year 2015 comp sales were down 3 percent. Adjusted diluted EPS for the year were $3.77, a 14 percent decline from the prior year’s adjusted diluted EPS of $4.40.
Macy’s, which closed 40 stores in 2015 as it engages in aggressive cost-cutting measures, has been on an extensive e-commerce and omnichannel push in recent months as it seeks to adapt new strategies to meet shifting consumer habits.
“We should not lose sight of the investments we made in 2015 that will help us down the road. We registered yet another year of double-digit growth in our online business, fueled by exceptional increases in mobile traffic and increased conversions, with exciting new offerings from macys.com and bloomingdales.com,” Lundgren said.
Macy’s also said that it is eyeing more real estate ventures, but noted that potential deals were still in the preliminary stages and it could not comment further.