Macy's, Inc. (NYSE:M) is scheduled to report its first quarter 2014 sales and earnings before the opening of financial markets on Wednesday, May 14, 2014. The company will webcast a call with financial analysts and investors that day at 10:30 a.m. ET.
Wall Street anticipates that the retail leader will earn $0.59 per share for the quarter, which is $0.04 more than last year's profit of $0.54 per share. iStock expects M to hit Wall Street's consensus number, the iEstimate is $0.59, too.
Revenue, like earnings, is expected to increase, a slight 1.1% year-over-year (YoY). Macy's consensus revenue estimate for Q1 is $6.46 billion, a little more than last year's $6.39 billion.
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Macy's is a retail organization operating stores and Internet Websites under two brands (Macy's and Bloomingdale's) that sell a range of merchandise, including apparel and accessories (men's, women's and children's), cosmetics, home furnishings and other consumer goods in 45 states, the District of Columbia, Guam and Puerto Rico.
The Census Bureau's Advanced Monthly Retail Trade Report for March 2014 confirms small growth for general merchandise stores. Compared to February through April 2013, sales for general merchandise stores increased 1.1%, which is spot on for Macy's forecasted top-line growth. Generally speaking, M outperforms the group as a whole; so, there could be some room for a little, little upside.
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Upside earnings surprises are what Macy's management has delivered 12 of the last 13 quarterly checkups. On average, the retailer earned 19.85% more than the consensus estimate.
For the most part, M's share price tagged along with surprises. Wall Street reacted positively eight of the last 13 with the stock gaining 0.16% to 9.94% in the days surrounding the earnings announcement. Meanwhile, the stock backpedaled five times by an average of -4.22%.
For retailers, the difference between an EPS bullish and bearish surprise usually comes down to margins. Macy's margins were steady in 2013 versus 2012 with gross margin of 40.12% versus 40.27%, respectively.
One minor, MINOR concern is inventory, which increased 4.69% versus YoY sales growth of 0.88%. We'd like the two line items to be in-line or for revenue to boast the higher percentage. However, the difference is so great that clearance sales go on endlessly.
Overall: Macy's, Inc.'s (NYSE:M) history, iEtimate and April's Advanced Monthly Retail Trade Report suggest earnings should be at least on target with room to the upside.
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