Earnings Preview: Macy's Inc.

Aug. 7.12 | About: Macy's Inc. (M)

Macy's Inc. (NYSE:M) is scheduled to report its Q2 2012 results on August 8, 2012, before market opens. The Street expects EPS and revenue of $0.64 and $6.12B, respectively.

In this article, I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from Macy's and the news from its closest competitors.

Macy

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter, it reported $0.43 EPS, beating analyst estimates of $0.40.

Macy

The consensus EPS estimate is $0.64 based on 16 analysts' estimates, up from $0.55 a year ago. Revenue estimates are $6.12B, up from $5.94B a year ago. The median target price by analysts for the stock is $43.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On April 10, 2012, UBS initiated Neutral rating for the company.
  • On April 9, 2012, Barclays reiterated Overweight rating for the company.

Latest News

  • On August 2, 2012, Macy's, Inc. reported total sales of $1.693 billion for the four weeks ended July 28, 2012, an increase of 5.1 percent compared with total sales of $1.611 billion in the four weeks ended July 30, 2011. On a same-store basis, Macy's, Inc. sales were up 4.1 percent in July 2012 as compared to July 2011.
  • On July 5, 2012, Macy's Inc reaffirmed fiscal 2012 guidance and expects same store sales to rise by approximately 3.7%, with earnings per diluted share (EPS) in the range of $3.25 to $3.30. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $3.37 for fiscal 2012.
  • On May 18, 2012, Macy's Inc announced that it declared a regular quarterly dividend of $0.20 per share on Macy's common stock, payable July 2, 2012, to shareholders of record at the close of business on June 15, 2012.
  • On May 9, 2012, Macy's Inc announced that it continues to expect same-store sales to grow by approximately 3.5% for the remainder of fiscal 2012. When added to the first quarter's reported results, same-store sales growth for fiscal 2012 as a whole now is expected to be approximately 3.7% - slightly higher than previous guidance for a same-stores sales increase of approximately 3.5% in fiscal 2012.
  • On February 21, 2012, Macy's Inc announced that it assuming earnings per share on a diluted basis of $3.25 to $3.30 for fiscal 2012. According to I/B/E/S Estimates, analysts on an average are expecting the Company to report EPS of $3.26 for fiscal 2012.

Competitors

J.C. Penney Company Inc. (NYSE:JCP), Kohl's (NYSE:KSS), Sears Holdings (NASDAQ:SHLD), and Target Corp. (NYSE:TGT) are considered peers for Macy's and the table below provides the key metrics for these companies and the industry.

Macy

The chart below compares the stock price changes as a percentage for the selected companies and S&P 500 index for the last one-year period.

M Chart

M data by YCharts

Competitors' Latest Development

  • On July 23, 2012, Reuters reported that J.C. Penney Co Inc raised $248 million by selling part of its stake in a Simon Property Group Inc unit.
  • On July 10, 2012, Reuters reported that J C Penney Company Inc announced another 350 job cuts at its Plano, Texas headquarters, completing a reorganization of its home office designed to help it bring costs in line with those of rivals.
  • On July 5, 2012, Target Corp. announced that combined with the outlook for July, the Company is on-track to deliver second quarter sales and adjusted earnings per share in line with the guidance provided at the time of first quarter earnings release.
  • On June 13, 2012, Target Corp. announced that its Board of Directors has declared a quarterly dividend of $0.36 per common share. The dividend is payable September 10, 2012 to shareholders of record at the close of business August 15, 2012.
  • On May 31, 2012, Kohl's Corporation announced that it now expect second quarter 2012 comparable store sales to be modestly negative.
  • On May 17, 2012, Sears Holdings Corp announced that Board of Directors has approved plans to pursue a partial spin-off of interest in Sears Canada Inc. Holdings, which currently owns approximately 95% of the issued and outstanding common shares of Sears Canada, expects to distribute common shares of Sears Canada held by Holdings on a pro rata basis to holders of Holdings' common stock such that following the spin-off, Holdings will retain approximately 51% of the issued and outstanding common shares of Sears Canada.
  • On May 16, 2012, Target Corp. announced that for the second quarter of 2012, it expects adjusted EPS of $1.04 to $1.14 and GAAP EPS of $0.94 to $1.04. For fiscal 2012, the company has raised its guidance by 5 cents and now expects adjusted EPS of $4.60 to $4.80 and GAAP EPS of $4.10 to $4.30. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $1.00 for the second quarter of 2012; EPS of $4.29 for fiscal 2012.
  • On May 15, 2012, J C Penney Company Inc reaffirmed fiscal 2012 earnings guidance and expects earnings per share of $2.16 per share which excludes non-cash qualified pension expense, restructuring charges and markdown reserves as the Company transition merchandise assortment.
  • On May 10, 2012, Kohl's Corporation announced that for the second quarter of 2012, it expects earnings of $0.96 to $1.02 per diluted share. The guidance is based on total sales growth of 2% to 3% and comparable store sales growth of flat to 1% and includes expected second quarter share repurchases of $250 million.
  • On May 3, 2012, J C Penney Company Inc announced that Ken Hannah has been named Chief Financial Officer effective May 7,2012.
  • On May 1, 2012, Sears Holdings Corp announced that for the first quarter of 2012, it expects net income from continuing operations attributable to the shareholders of between $155 million and $195 million (between $1.46 and $1.84 per diluted share from continuing operations), the above range includes approximately $400 million ($235 after tax and minority interest) of gains from the sale of certain U.S. and Canadian stores which generated $440 million of proceeds, and adjusted EBITDA of $135 million to $195 million.
  • On April 24, 2012, Sears Holdings Corp announced the addition of a wholly owned subsidiary called MetaScale, a provider of technology managed services and data solutions.
  • On April 17, 2012, Sears Holdings Corp announced the completion of the sale of eleven Sears full line store locations to General Growth Properties for $270 million. Sears has received the sale proceeds and the stores will continue to operate as Sears locations into 2013 or 2014 with final closing dates to be determined and announced later this year.
  • On April 12, 2012, Reuters reported that J.C. Penney Co Inc said on April 11, 2012 that Michael Dastugue is leaving on April 13, 2012 after just 15 months as chief financial officer as the department store chain continues to work on its overhaul under its new chief executive.
  • On April 6, 2012, Reuters reported that J.C. Penney Co Inc laid off about 1,000 employees at its headquarters in Plano, Texas and Pittsburgh customer call center, as part of its previously announced cost cutting measures, the Company said in a regulatory filing on April 06, 2012.
  • On April 5, 2012, Target Corp. updated first quarter 2012 guidance and expects adjusted earnings per share in the range of $1.04 to $1.10, compared with prior guidance of $0.97 to $1.07. The company expects GAAP EPS of $0.96 to $1.02, compared with prior guidance of $0.88 to $0.98. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $1.03 for fiscal 2012.
  • On March 23, 2012, J.C. Penney Co Inc announced that its Board of Directors declared a quarterly dividend on the Company's common stock of $0.20 per share. The dividend is payable May 1, 2012, to Company stockholders of record at the close of business on April 10, 2012.
  • On March 19, 2012, Target Corporation announced that, as expected, it has completed the $10 billion share repurchase program authorized by its board of directors in November 2007.
  • On March 15, 2012, Target Corp. announced that it has declared a quarterly dividend of 0.30 per common share. The dividend is payable June 10, 2012 to shareholders of record at the close of business May 16, 2012.
  • On March 8, 2012, Kohl's Corporation announced that it has opened eight new stores, bringing approximately 1,000 new jobs nationwide. The Company totally operates 1,134 stores in 49 states.
  • On February 24, 2012, J.C. Penney Co Inc announced that as previously announced, the Company expects fiscal 2012 earnings to meet or exceed $1.59 per share. This includes approximately $15 million of restructuring charges to complete the realignment of the Company's supply chain operations and approximately $197 million of non-cash qualified pension plan expense.
  • On February 23, 2012, Kohl's Corporation issued its initial guidance for fiscal 2012. Based on assumptions of a total sales increase of 4.5% and a comparable store sales increase of 2%, the Company expects earnings per diluted share of $4.75. For the first fiscal quarter, the company expects earnings per diluted share of $0.60 based on assumptions of a total sales increase of 3% and a comparable store sales increase of 1%. According to I/B/E/S estimates, analysts were expecting the Company to report EPS of $4.95 for fiscal 2012; EPS of $0.77 for the first quarter of 2012.
  • On February 23, 2012, Sears Holdings Corp announced a definitive agreement for the sale of eleven Sears full line store locations to General Growth Properties for a purchase price of $270 million.
  • On February 23, 2012, Sears Holdings Corp announced that it intends to separate Sears Hometown and Outlet Businesses and certain hardware stores through a proposed rights offering that is expected to raise approximately $400 million to $500 million.
  • On February 23, 2012, Target Corp. announced that for first quarter of 2012, it expects adjusted earnings per share in the range of $0.97 to $1.07 and GAAP EPS of $0.88 to $0.98. The 9 cent difference between these two ranges represents the EPS impact in the quarter of the expected expenses related to the Canadian market entry.

Technical Overview


The stock has a market capitalization of $15.39B and is currently trading at $37.26 with a 52-week range of $22.66-$42.17. The stock's year-to-date performance has been 17.02%. It is currently trading above 20, 50 and 200 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.