Despite some sales decline, Macy’s Inc. saw its net income in the third quarter more than double to $34 million from $15 million in the year ago quarter.
The department store chain reported earnings per diluted share reached 12 cents, or 23 cents per share excluding restructuring and other costs and non-cash retirement plan settlement charges. This compares with 5 cents per share in the third quarter of 2016, or 17 cents excluding non-cash retirement plan settlement charges.
Sales in the three months ended ended Oct. 28 totaled $5.3 billion, a decrease of 6.1 percent, compared with sales of $5.6 billion in the third quarter of 2016. Macy’s said the decline in total sales reflects, in part, the closure of stores previously announced by the company.
Comparable sales at the department store chain were down 3.6 percent in the third quarter, on an owned plus licensed basis. On an owned basis alone, sales were down 4 percent.
“Overall, we’re pleased with the results for the third quarter and we remain on track to meet our full-year sales and earnings guidance for 2017. Importantly, we also saw better gross margin performance primarily due to our tightly controlled inventory position,” said Jeff Gennette, Macy’s chief executive officer.
“A highlight of the third quarter was the launch of the new Star Rewards loyalty program — our best customers are responding positively. We also saw continued double-digit growth in digital and are encouraged by the potential of Backstage in Macy’s stores,” he added. Backstage is Macy’s offprice format.
Operating income for the third quarter of 2017 totaled $121 million, or 2.3 percent of sales, compared to $107 million, or 1.9 percent of sales, for the third quarter of 2016.
Operating income for the third quarter of 2017 totaled $176 million, or 3.3 percent of sales, excluding restructuring and other costs of $33 million and non-cash retirement plan settlement charges of $22 million.
Macy’s reaffirmed previous guidance for full-year 2017, expecting comparable sales on an owned basis to decline between 2.2 percent and 3.3 percent, with comparable sales on an owned plus licensed basis to decline between 2 percent and 3 percent. Total sales are expected to be down between 3.2 percent and 4.3 percent.
Macy’s expects adjusted earnings per diluted share of between $3.38 and $3.63 in 2017, excluding the impact of the anticipated settlement charges, restructuring and other costs and net premiums and fees associated with debt repurchases.