Earnings Preview: Macy's

Macy's (M) is expected to report Q3 earnings before market open Wednesday Nov. 12, with a conference call scheduled for 10:30 am ET.

Guidance

Analysts are looking for a loss of (19c) on revenue of $5.5B. The consensus range is (25c) to (11c) for EPS, and revenue of $5.37B to $5.67B, according to First Call. On October 10, the company lowered its FY08 EPS view to $1.30 to $1.50 from $1.70 to $1.85 vs. First Call consensus of $1.37 and said that with the uncertain direction of the economy, predictions of future performance remain difficult. Macy's recently reported October same-store sales fell 6.3% vs. Retail Metrics estimate of down 5.8% and reiterated its guidance for SSS in the fall season of 2008 to be down by 3% to 6%. Given Q3, Q4 SSS are expected to be down by 1% to 6%. The company expects a SSS decrease in the low double digits in November.

Analyst Views

Due to rising food and fuel prices, as well as the housing market crisis, credit crunch and increased job losses, consumers in the U.S. have avoided shopping at department stores, instead flocking to discount apparel chains. Zacks Investment says that because Macy's has a recent history of topping expectations, it is difficult to say whether Q3 results will disappoint shareholders. However, the analyst says that if earnings match or beat expectations, guidance is likely to be weak in this environment.