- Macy's shares took off after beating profit and sales estimates as it increased margins, cut costs, and reduced inventory.
- CEO Tony Spring said Macy's is entering the key holiday period with a "healthy inventory position."
- The department store chain raised the low end of its full-year EPS and sales guidance.
Macy’s (M) shares jumped over 5% Thursday after the department store chain posted better-than-expected results as it improved its margins, cut costs, and reduced inventory.
The retailer reported third quarter fiscal 2023 earnings per share (EPS) of $0.21, while sales fell 7% from a year ago to $4.86 billion. Both exceeded forecasts.
Macy’s indicated gross margin jumped 160 basis points (bps) to 40.3%, with merchandise gross margin higher by 110 bps because of lower permanent price markdowns for the Macy's brand and reduced freight expenses.
The company slashed selling, general, and administrative costs by $48 million to $2 billion, pointing to “ongoing expense discipline.”
Macy’s reduced its inventory by 6%, and CEO Tony Spring indicated that the firm is “entering the holiday period in a healthy inventory position.”
The company boosted the low end of its full-year earnings and sales guidance. It now anticipates EPS of $2.88 to $3.13, and sales between $22.9 billion to $23.2 billion. That’s up from its previous outlook of EPS in the range of $2.70 to $3.20 and sales of $22.8 billion to $23.2 billion.
Although Macy’s shares rose Thursday, they have lost about a third of their value this year.