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Will Q1 Earnings Hold a Surprise for Macy's (M) Stock?
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Macy's, Inc. (M - Free Report) , one of the leading department store retailers, is slated to report first-quarter fiscal 2017 results on May 11. In the preceding quarter, the company delivered a positive earnings surprise of 2.5%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is whether Macy's will be able to post positive earnings surprise in the quarter to be reported. In three out of the trailing four quarters, the company’s bottom-line has surpassed the Zacks Consensus Estimate. The current Zacks Consensus Estimate for the quarter under review is 35 cents, reflecting a year-over-year decline of over 12%. We noted that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $5,473 million, down above 5% from the year-ago quarter.
Macy's forms part of the Retail-Wholesale sector. As per the latest Earnings Preview, total earnings for the sector are expected to decline by 2.2%, while revenue is projected to improve 3.3%.
We believe Macy’s sustained focus on price optimization, inventory management, merchandise planning and private label offering act as the primary catalysts. In an attempt to augment sales, profitability and cash flows, the company has been taking steps such as integration of operations as well as developing eCommerce business and Macy’s Backstage off-price business. Further, it is carrying out the expansion of Bluemercury and online order fulfillment centers.
However, a competitive retail landscape, a mature domestic market and cautious consumer spending continue to pose concerns. Macy’s dwindling top-line and bottom-line results remain the primary threat for investors. A look at the performance in fiscal 2015 unveils that net sales declined 0.7%, 2.6%, 5.2% and 5.3% in the first, second, third and fourth quarters, respectively. Maintaining the same chronological order, we note that earnings per share fell 6.7%, 20%, 8.2% and 14.3%, respectively. In fiscal 2016 net sales decreased 7.4%, 3.9%, 4.2% and 4% in the first, second, third and fourth quarters, while earnings per share plunged 28.6%, 15.6%, 69.6% and 3.3% during the respective quarters.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Macy's is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Macy's has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 35 cents. Macy's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +0.62% and carries a Zacks Rank #2.
DSW Inc. has an Earnings ESP of +2.94% and carries a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Will Q1 Earnings Hold a Surprise for Macy's (M) Stock?
Macy's, Inc. (M - Free Report) , one of the leading department store retailers, is slated to report first-quarter fiscal 2017 results on May 11. In the preceding quarter, the company delivered a positive earnings surprise of 2.5%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is whether Macy's will be able to post positive earnings surprise in the quarter to be reported. In three out of the trailing four quarters, the company’s bottom-line has surpassed the Zacks Consensus Estimate. The current Zacks Consensus Estimate for the quarter under review is 35 cents, reflecting a year-over-year decline of over 12%. We noted that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $5,473 million, down above 5% from the year-ago quarter.
Macy's forms part of the Retail-Wholesale sector. As per the latest Earnings Preview, total earnings for the sector are expected to decline by 2.2%, while revenue is projected to improve 3.3%.
Macy's Inc Price, Consensus and EPS Surprise
Macy's Inc Price, Consensus and EPS Surprise | Macy's Inc Quote
Factors at Play
We believe Macy’s sustained focus on price optimization, inventory management, merchandise planning and private label offering act as the primary catalysts. In an attempt to augment sales, profitability and cash flows, the company has been taking steps such as integration of operations as well as developing eCommerce business and Macy’s Backstage off-price business. Further, it is carrying out the expansion of Bluemercury and online order fulfillment centers.
However, a competitive retail landscape, a mature domestic market and cautious consumer spending continue to pose concerns. Macy’s dwindling top-line and bottom-line results remain the primary threat for investors. A look at the performance in fiscal 2015 unveils that net sales declined 0.7%, 2.6%, 5.2% and 5.3% in the first, second, third and fourth quarters, respectively. Maintaining the same chronological order, we note that earnings per share fell 6.7%, 20%, 8.2% and 14.3%, respectively. In fiscal 2016 net sales decreased 7.4%, 3.9%, 4.2% and 4% in the first, second, third and fourth quarters, while earnings per share plunged 28.6%, 15.6%, 69.6% and 3.3% during the respective quarters.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Macy's is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Macy's has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 35 cents. Macy's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Wal-Mart Stores, Inc. (WMT - Free Report) has an Earnings ESP of +2.08% and also carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +0.62% and carries a Zacks Rank #2.
DSW Inc. has an Earnings ESP of +2.94% and carries a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>