Press Release:
Macy’s, Inc. Reports Earnings of 67 Cents Per Diluted Share for the Second Quarter, an Increase of 22%
Company raises earnings guidance for fiscal 2012 to $3.30 to $3.35 per diluted share
CINCINNATI–(BUSINESS WIRE)–
Macy’s, Inc. (NYSE:M) today reported earnings of 67 cents per diluted share for the second quarter of 2012, ended July 28, 2012. This represents a 22 percent increase in earnings per share from earnings of 55 cents per diluted share in the second quarter of 2011.
Macy’s, Inc.’s diluted earnings per share in the first half were $1.09, an increase of 27 percent compared with earnings of 86 cents per share in the first half of 2011.
“We were pleased with our spring season results, and they came on top of exceptionally strong spring season performances in each of the past two years. This indicates that our business continues to have forward momentum, even with challenges that include a soft economy, lower spending by international tourists, and temporary disruptions associated with the major remodeling of our Herald Square flagship store in New York City which was initiated in March,” said Terry J. Lundgren, Macy’s, Inc. chairman, president and chief executive officer. “In response to these challenges, we have stayed very firmly focused on driving profitable sales growth while running the business with discipline to maintain margins and manage expenses.
“We are entering the fall season with optimism about our ability to grow sales and capture market share, especially in the holiday season when shoppers naturally turn first to Macy’s and Bloomingdale’s. The direction of the overall economy is outside of our control, so we will concentrate on what our company does best. We look forward to maintaining our holiday traditions, such as the Macy’s Thanksgiving Day Parade, to help our country, our customers and our employees celebrate with family and friends. We feel good about our very strong brand-driven merchandise assortment for gift-giving and self-purchase this fall, as well as the creative and compelling marketing programs that will drive consumer interest and traffic in stores and online.”
“Meanwhile, we will continue to maintain our expense discipline, especially in those areas that are not readily apparent to the customer,” Lundgren said. “In the fourth quarter, we will take a scheduled break in the multi-year Herald Square remodeling project so that customer shopping patterns are uninterrupted during the holiday season. We expect all of our first- and second-floor selling space at Herald Square to be fully reopened over the next 90 days, including the world’s largest women’s shoe department, which opens partially this month and will continue in stages in the months ahead.”
Sales
Sales in the second quarter totaled $6.118 billion, up 3.0 percent from total sales of $5.939 billion in the second quarter of 2011. On a same-store basis, Macy’s, Inc.’s second quarter sales were up 3.0 percent in 2012 as compared to the second quarter of 2011.
For the year to date, Macy’s, Inc. sales totaled $12.261 billion, up 3.7 percent from total sales of $11.828 billion in the first 26 weeks of 2011. On a same-store basis, Macy’s, Inc.’s first half sales were up 3.7 percent in 2012 as compared to the first half of 2011.
Online sales (macys.com and bloomingdales.com combined) were up 36.1 percent in the second quarter and 34.8 percent in the first half of 2012. Online sales positively affected the company’s same-store sales by 1.7 percentage points in the second quarter and 1.6 percentage points in the year to date. Online sales are included in the same-store sales calculation for Macy’s, Inc.
In the second quarter, the company opened two new Bloomingdale’s Outlet stores. In the first half, two new Macy’s stores also opened in the Milwaukee and Salt Lake City markets. In the second half of 2012, the company is opening three new Bloomingdale’s Outlet stores and closing a Macy’s store in Santa Ana, CA, as previously announced.
Operating Income
Macy’s, Inc.’s operating income totaled $554 million or 9.1 percent of sales for the quarter ended July 28, 2012, compared with operating income of $506 million or 8.5 percent of sales for the same period last year.
For the first half of 2012, Macy’s, Inc.’s operating income totaled $945 million or 7.7 percent of sales, compared with operating income of $836 million or 7.1 percent of sales for the same period last year.
Cash Flow
Net cash provided by operating activities was $638 million in the first half of 2012, compared with $587 million in the first six months of last year. Net cash used by investing activities in the first half of 2012 was $393 million, compared with $222 million a year ago. Net cash used by financing activities in the first six months of 2012 was $1.468 billion, compared with $334 million in the first half of 2011. The increase in cash used by financing activities resulted primarily from the paydown of $460 million more in debt, the buyback of stock and the increased dividend.
The company repurchased approximately 10.6 million shares of its common stock for a total of approximately $374 million in the second quarter of 2012. In the fiscal year to date, the company repurchased approximately 16.0 million shares of its common stock for approximately $588 million. At July 28, 2012, the company had remaining authorization to repurchase up to approximately $764 million of its common stock. The company previously stated that it plans to repurchase at least $1 billion in shares in fiscal 2012 under its repurchase program.
Looking Ahead
The company is raising its earnings guidance for full-year 2012 to a range of $3.30 to $3.35 per diluted share, compared with previous guidance for earnings per diluted share of $3.25 to $3.30. Guidance for same-store sales in fiscal 2012 remains unchanged at an increase of approximately 3.7 percent.
Macy’s, Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2011 sales of $26.4 billion. The company operates about 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s, as well as the macys.com and bloomingdales.com websites. The company also operates nine Bloomingdale’s Outlet stores.
