The Cincinnati-based company said net income for the quarter ended Nov. 2 came in at $177 million, or 47 cents a share. Earnings per share rose 31% compared to the year-earlier quarter and exceeded consensus expectations by 8 cents.
Macy's also beat on top line sales. The company reported net sales of $6.27 billion, above analysts' expectations of $6.19 billion, according to Thomson Reuters.
Shares were rising 5.4% to $48.83 before the market opened.Comparable sales, which includes net sales from stores open at least one full fiscal year as well as online sales at macys.com and bloomingdales.com, rose by 3.5% in the quarter and, combined with sales from departments licensed to third parties, rose 4.6%, Macy's said, despite a rough quarter with softer-than expected back-to-schools sales and a two-week government shutdown. Gross margin slipped marginally in the quarter. Macy's reported third-quarter gross margin at 39.2% of net sales compared to 39.6% in 2012. Macy's reiterated its guidance provided in August 2013. Comparable sales are expected to increase in the range of 2.5% to 4% in the second half of 2013, and, for the full year, in the range of 2% to 2.9%. Macy's had lowered its fiscal 2013 earnings expectations to $3.80 to $3.90 per diluted share in August after a disappointing second quarter. The company reiterated its earnings expectations for the year. "Our improved sales performance resulted from continued success in the execution of our key strategies -- My Macy's localization, omni-channel integration and Magic Selling customer engagement. In addition, business in the third quarter benefitted from intensified marketing strategies to emphasize the outstanding value in our merchandise deliveries," said Terry J. Lundgren, chairman, president and CEO of Macy's in a press release. "Both Macy's and Bloomingdale's performed well in the quarter, and we saw improvement in the sales trend in every region of the country compared with the spring season. Lundgren particularly pointed out that October was a strong sales month. The company is entering the fourth-quarter with "confidence," he said in his statement. "Our success in the fourth quarter will be driven by a wide selection of exclusive products from the most-wanted brands and designers. We will bring them to our customers, whether they shop in our stores, online, via mobile -- or all three," Lundgren said. "The values we offer will be appealing. We will be better able to satisfy customers' needs with an energized organization supported by the hiring of 83,000 seasonal associates. Our in-store and online executions will complement each other, and our marketing will clearly communicate the Magic of Macy's and the exceptional holiday fashion at Bloomingdale's." The company will host a conference call at 10:30 a.m. EST to discuss the results. Written by Laurie Kulikowski in New York.
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