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Here's What to Expect from Macy's (M) Q4 Earnings as Stock Tumbles

Macy's M shares slipped 2.3% Thursday to help extend its 2019 downturn that runs counter to the broader market’s resurgence. The question now is does Macy’s fall signal that investors are worried about the company’s fourth-quarter earnings results?

Overview

Retail investors might be nervous after the U.S. Commerce Department said last week that overall U.S. holiday sales experienced their largest drop since 2009. But Macy’s already warned Wall Street of this after it released its holiday shopping results last month. In fact, M shares tanked nearly 18% on January 10, which marked their worst day ever, after the department store chain lowered its 2018 earnings outlook on the back of lower-than-expected holiday sales.

Macy’s comparable sales in the November and December period climbed just combined 1.1%. “The holiday season began strong – particularly during Black Friday and the following Cyber Week – but weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” chief executive Jeff Gennette said in a statement.

With that said, retail behemoth Walmart’s recently-reported Q4 results helped prove that its e-commerce push has paid off in the Amazon AMZN age. Still Macy’s and other department stores, inducing Kohl's KSS, JC Penney JCP, and Nordstrom JWN have struggled as more brands, such as Nike NKE, push for more direct to consumer sales (also read: Buy Walmart Stock After Blowout Holiday Quarter Earnings?).

 

Q4 Outlook & Earnings Trends

Looking ahead, Macy’s Q4 revenues are projected to sink 2.4% from the year-ago period to $8.46 billion, based on our current Zacks Consensus Estimate. This would represent a downturn from the third quarter’s roughly 2.3% top-line growth.

At the bottom end of the income statement, Macy’s adjusted quarterly earnings are projected to fall 6% from the prior-year period to reach $2.65 a share. Investors should also note that the company’s earnings estimate revision picture has turned negative recently. More specifically, the company’s fourth-quarter earnings estimate has fallen by $0.11 a share in the last 60 days.

 

 

Bottom Line

Macy’s is a Zacks Rank #4 (Sell) at the moment based on its recent earnings estimate revision activity. The company also sports a “D” grade for Growth in our Style Scores system. M stock closed regular trading Thursday at $24.45 a share. This marked a 42% downturn from its 52-week high and does leave room for Macy’s stock to run.

Macy’s is scheduled to report its Q4 financial results before the market opens on Tuesday, February 26. So, make sure to head back to Zacks for a complete break down of the firm’s actual quarterly metrics.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Nordstrom, Inc. (JWN): Free Stock Analysis Report
 
Kohl's Corporation (KSS): Free Stock Analysis Report
 
Macy's, Inc. (M): Free Stock Analysis Report
 
J. C. Penney Company, Inc. (JCP): Free Stock Analysis Report
 
NIKE, Inc. (NKE): Free Stock Analysis Report
 
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