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Q2 sales, earnings & cash flow exceed expectations, Macy's

12 Aug '10
5 min read

The company opened no new stores in the first half of 2010. In the second half of 2010, the company is opening two new Macy's stores in Palmdale and Tracy, CA; a new Bloomingdale's store in Santa Monica, CA (opened Aug. 6); and four new Bloomingdale's Outlet stores, as previously announced.

Operating Income
Macy's, Inc.'s operating income totaled $370 million or 6.7 percent of sales for the quarter ended July 31, 2010, compared with operating income of $248 million or 4.8 percent of sales for the same period last year. Second quarter 2009 operating income included $34 million in restructuring-related costs. Excluding these costs, operating income for the second quarter of 2009 was $282 million or 5.5 percent of sales.

For the first half of 2010, Macy's, Inc.'s operating income totaled $573 million or 5.2 percent of sales, compared with operating income of $134 million or 1.3 percent of sales for the same period last year. Macy's, Inc.'s first half 2009 operating income included $172 million in restructuring-related costs. Excluding these costs, operating income in the first half of 2009 was $306 million or 3.0 percent of sales.

Cash Flow
Net cash provided by operating activities was $288 million in the first half of 2010, compared with $420 million in the first half last year. Net cash used by investing activities in the first half of 2010 was $124 million, compared with $168 million a year ago. Net cash used by financing activities in the first half of 2010 was $642 million, including $584 million used to repay debt. This compares with net cash used by financing activities in the first half of 2009 of $1.045 billion, including $958 million used to repay debt.

Looking Ahead
Macy's, Inc. currently expects same-store sales in the second half of fiscal 2010 to be up in the range of 3 percent to 3.5 percent, which would result in full-year 2010 same-store sales to be up between 4 percent and 4.2 percent. At the beginning of the year, the company's initial guidance was for a 2010 same-store sales increase of 1 percent to 2 percent. At the end of the first quarter, full-year same-store sales guidance was raised to up 3 percent to 3.5 percent, reflecting improvement in the business trend.

Based on stronger sales expectations, Macy's, Inc. is increasing its full-year 2010 earnings guidance to $1.85 to $1.90 per diluted share. This compares with previous guidance of $1.75 to $1.80 per diluted share, and initial earnings guidance of $1.55 to $1.60 per diluted share provided at the beginning of the year.

Macy's Inc

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