Boston, MA 05/19/2014 (wallstreetpr) – Macy’s, Inc. (NYSE:M) posted 1.6% lower revenue for the first quarter of FY2014, but it posted a 9% earning during the same quarter.
First-quarterFY2014 results
Macy’s posted a 1.6% reduction in revenue for the 1Q2014. This was surprising. The quarterly result was also 3% shorter than the average analyst revenue estimates, which was $6.46 billion. The result was surprising because, for the last five years, the company has been posting better incomes and its income triple since 2010. This
Even after a weaker sales, Macy’s posted a solid 9% earnings per share gain.
The bad weather in the north U.S. was the main reason behind Macy’s lower 1Q2014 sales figures.
Sales pickup in April
Sales was down for Macy’s during January –March, but in April sales started to pick up. As the weather began to improve, more and more customers started coming into Macy’s. The demand for summer wear is increasing. The pent-up demand is helping the company is selling more products. The sales have already brought back sales to positive.
In May, Macy’s, Inc. (NYSE:M) is expected to have strong revenue growth due to more and more demand for the products. Seeing the numbers, the management was also comfortable keeping the same guidance for the full financial year which was 2.5% to 3% store sales growth.
Promising trend
When sales decline, margin also declines for retailers. But Macy’s has increased its operating margin by 30 basis points even when drop in sales numbers happened. Cost cutting was another way which Macy’s reduced 20 basis points in operating expenses.
Outlook
Macy’s is a strong departmental franchisee and its financial figures speak about it. Even during a “bad” quarter, the company posted an increase in earnings. The sales figures also started growing faster in the next month. Macy’s, Inc. (NYSE:M) has significantly increased the dividend paid by it.
