Macy's falls on lower profits and slower sales

Shares of Macy's fell, after the US department store chain reported first-quarter results that missed analyst forecasts and blamed a slowdown in sales on a number of factors, including the West Port disputes and lower spending by international tourists.

The Cincinnati-based company reported profits of $193m or 56 cents a share, compared with profits of $224m or 60 cents a share in the same period a year ago. Sales slid 0.7 per cent to $6.2bn.

Analysts on Wall Street had forecast earnings of 62 cents a share, on sales of $6.3bn.

Macy's, which owns both the eponymous and Bloomingdale's brands, said same-store sales, including its licensed divisions, fell 0.1 per cent. Excluding licensed departments, same-store sales, a key industry metric, fell 0.7 per cent, missing expectations for a 1.2 per cent gain.

The retailer attributed its disappointing sales figures to delayed shipments from the west coast port slowdown, the severe winter weather, lower levels of spending by international tourists and reorganisation in some of its divisions. "Fortunately, most of these short-term issues are largely behind us," Terry J Lundgren, chief executive, said.

Macy's, which has faced increasing competition from discount retailers such as TJ Maxx, announced earlier this month that its first four pilot off-price stores would open in New York City this autumn.

The company also reported a 15 per cent rise in its dividend and announced a $1.5bn increase in its share buyback programme.

Shares in Macy's, which have gained more than 10 per cent in the past year, fell 2.3 per cent to $63.73.

Ralph Lauren fell 3 per cent to $129.04, after the retailer said same-store sales declined in its fiscal fourth-quarter and profits fell nearly 19 per cent from the year before.

The New York-based company reported profits of $124m or $1.41 a share, compared with $153m or $1.68 a share in the same period a year ago. Excluding foreign currency impact, the company reported earnings of $1.69 a share. Sales rose 1 per cent to $1.9bn.

Analysts on Wall Street had forecast earnings of $1.32 a share, on sales of $1.9bn.

The company said consolidated same-store sales fell 4 per cent, following a 2 per cent drop in the previous quarter. On a constant currency basis, comparable sales rose 1 per cent in the financial fourth quarter.

Ralph Lauren said it expected consolidated revenues to rise in the mid-single digits in financial 2016 on a constant currency basis. Based on current exchange rates, however, the company expected foreign currency would have about a 450 basis point negative affect on sales growth.

Shares of Delta Air Lines gained 2 per cent to $47.08, after the US carrier boosted its quarterly dividend by 50 per cent to 13.5 cents a share, which will be payable starting in September. The company also announced a new $5bn share buyback programme to be completed no later than December.

The company said both programmes were expected to return more than $6bn to shareholders by the end of 2017.

Pall Corp shares climbed 5 per cent to $124.26, after Danaher Corp agreed to acquire the maker of water-filtration and purification systems in a $13.8bn all-cash deal. Shares of Danaher Corp climbed 1.8 per cent to $87.57.

US stocks were little changed, as the latest retail sales report was little changed from the previous month.

The S&P 500 climbed 0.1 per cent to 2,101.75, the Dow Jones Industrial Average was little changed at 18,076.30. The Nasdaq Composite gained 0.2 per cent to 4,988.15.

[email protected]

Twitter: @mamtabadkar

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation