Cue the jingle bells.
Just in time for the holidays, Macy’s Inc.’s profits are continuing to move in the right direction.
The once-beleaguered department store chain today posted better-than-expected third-quarter earnings — and revenues that met market watchers’ forecasts — thanks to double-digit growth in its digital business and improving trends at its more experiential stores.
Macy’s said its earnings during the period more than doubled year over year to $62 million, or 20 cents per diluted share. On an adjusted basis, profits advanced 28 percent to $83 million, or 27 cents per diluted share — easily topping market watchers’ forecasts for earnings of 14 cents per diluted share.
Meanwhile, revenues edged up nearly 2 percent to $5.4 billion, in line with analysts’ expectations. Comparable store sales also gained 3.3 percent, marking the company’s fourth consecutive quarter of comp sales growth, noted chairman and CEO Jeff Gennette — adding that Macy’s, Bloomingdale’s and Bluemercury “all performed well.”
“Our strategic initiatives are gaining momentum and delivering results. Another double-digit quarter from our digital business and a strong stores performance combined to help us exceed expectations,” he said. “We continue to see an improved trend in brick-and-mortar across the fleet, with particularly strong results from our Growth50 stores.” (Growth50 stores are a strategy the firm unveiled in February, focused on revenue-generating tactics such as the expansion of Backstage, more fashion and localized product, increased in-store technology and improved fixtures, as well as facilities in 50 of its stores.)
In line with the better-than-expected results — as well a promising outlook for the holidays — Macy’s improved its guidance for the fiscal year. It now expects comparable sales growth of 2.3 percent to 2.5 percent, compared with its prior range of 2.1 percent to 2.5 percent.
Net sales are forecast to improve 0.3 percent to 0.7 percent, compared with its previous guidance of flat to 0.7 percent. Adjusted EPS should land between $4.10 to $4.30 — better than the prior range of $3.95 to $4.15.
“The holiday season is when Macy’s truly shines,” Gennette said of the current fourth quarter. “We have the right merchandise, the right marketing and the right customer experiences in place to deliver a strong fourth quarter.”
As of 8:30 a.m. ET Macy’s shares were up less than 1 percent to $36.
Competitor Nordstrom will report its Q3 results on Thursday.