Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Macy's Inc., the second-largest U.S. department-store company, posted earnings that trailed analysts' estimates after discounts meant to lure shoppers eroded profit margins.
Second-quarter net income rose 3.9 percent to $292 million, or 80 a share, from $281 million, or 72 cents, a year earlier, the Cincinnati-based company said today in a statement. Analysts had estimated 86 cents on average, according to data compiled by Bloomberg.
Chief Executive Officer Terry Lundgren has struggled to keep Macy’s sales growing while a choppy economic recovery hurts consumer spending. Macy’s, which ended the first quarter with 4.7 percent more inventory than a year ago, shifted three days of its Friends & Family sale into the second quarter, narrowing its gross margin.
“Some clearance activity was likely required this period,” Charles Grom, an analyst at Sterne Agee & Leach Inc., said in a note to clients before the results were released. He recommends buying the shares.
ADVERTISEMENT
Second-quarter sales at stores open at least a year rose 3.4 percent, missing the projection of 3.9 percent. Macy’s also cut its full-year forecast to 2 percent to 2.5 percent, down from a previous projection of as much as 3 percent.
The stock fell 3.6 percent to $57.58 in early trading after the report was released. Macy’s had gained 12 percent this year through yesterday.
By Kevin Orland in Chicago; Editor: Nick Turner
