How Will Macy's (M) Stock React to Sluggish Q3 Sales, Outlook Cut?

Macy's (M) earlier this morning reported its third quarter 2015 earnings results. Profits topped analysts' forecasts while sales slipped.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Macy's (M) - Get Report  earlier this morning reported its third quarter 2015 earnings results. Profits topped analysts' forecasts while sales slipped. 

For the latest quarter ended October 31, the company earned 56 cents a share on sales of $5.87 billion. 

Analysts surveyed by Thomson Reuters had forecast the company to earn 53 cents a share on sales of $6.09 billion.

For the third quarter of 2014, the company earned 61 cents a share on revenue of $6.2 billion. 

"We are disappointed that the pace of sales did not improve in the third quarter, as we had expected," CEO Terry J. Lundgren stated. "Spending by domestic customers remained tepid, especially in key apparel and accessory categories."

Year-over-year, same-store sales dropped 3.9%. Consumer spending was sluggish due to the strong dollar.

For the full year, earnings are projected to come in between the range of $4.20 to $4.30 a share, down from the company's previous outlook of $4.70 to $4.80 a share.

Going forward, Macy's will be focusing on adapting to changing consumer shopping behavior and on initiatives to boost sales during the holiday season, the company noted. 

Along with these results, the company said it will not be pursuing a spinoff of its real-estate assets since the board said that the creation of a real-estate investment trust would provide enough value, according to theWall Street Journal

Shares of Macy's closed Tuesday's trading session up 1.69% to $47.02.

Based in Cincinnati, OH, Macy's is a wide variety of stores and websites under the Macy's, Bloomingdale's and Blue Mercury brands.

Separately, TheStreet Ratings team rates MACY'S INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate MACY'S INC (M) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: M

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