Macy's inks sixth year of adjusted EPS double-digit growth

28 Feb '15

3 min read

NYSE listed and US based apparel retailer, Macy’s, Inc said it reported its sixth consecutive year of double-digit growth in adjusted earnings per share in the fiscal month ended January 31, 2015.

According to Macy’s, in fiscal 2014, the company attained its long-term profitability target and has now turned its focus to driving additional profitable sales growth through a series of businesses initiatives.

For the full fiscal, earnings reached $4.22 per diluted share, or $4.40 by excluding items, which represents a rise of 9 per cent or 10 per cent, when excluding items over its previous fiscal.

Macy’s said the $4.40 per share is in line with management’s initial guidance provided at the beginning of the year, excluding items and has bettered from revised guidance given at end of third quarter.

“For the 52 weeks of 2014, Macy’s, Inc. sales totaled to $28.105 billion, up by just 0.6 per cent from $27.931 billion in last fiscal,” the retailer informed in a press release.

Sales in the 13-week fourth quarter of 2014 totaled $9.364 billion, up 1.8 per cent as against $9.202 billion in the fourth quarter of 2013.

Comparable sales growth on an owned plus licensed basis for the fourth quarter was 2.5 per cent and on an owned basis, fourth quarter comparable sales grew 2.0 per cent over 2013.

For the fiscal under review, the apparel retailer’s operating income climbed to $2.800 billion or 10.0 per cent of sales, compared with $2.678 billion or 9.6 per cent of sales for last fiscal.

Macy’s operating income includes expenses and asset impairment charges of $87 million associated with merchandising and marketing restructuring, store and field adjustments, and store closings.

Of this $87 million, $33 million was related to non-cash write-offs related primarily to store closings. Excluding these items, operating income for fiscal 2014 was $2.887 billion or 10.3 per cent of sales.

“Macy’s reached a milestone in 2014 by achieving a 14 per cent adjusted EBITDA rate, which positions us among best-in-class retailers,” said Terry Lundgren, CEO at Macy’s, Inc.

He added, “Our success in progressively increasing sales with double-digit increases in profitability in recent years has been the result of disciplined execution of our M.O.M. strategies and continuous improvement.”

“Having now reached such a healthy profitability rate, we are shifting our resources and energies to growing the topline faster while maintaining this high profitability rate level,” he observed.

Macy’s has now fully aligned its management team to fuel organic growth within its existing omnichannel business as customer shopping patterns evolve at both Macy’s and Bloomingdale’s.

It has established an entirely new part of its organisation to lead innovation and new growth initiatives, including off-price, international and new store formats.

The apparel retailer expects some of these new activities to enter start-up phases later in 2015 and said it remains committed to succeeding in a test-and-learn environment. (AR)

Fibre2fashion News Desk - India

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