Macy’s on Wednesday reported quarterly earnings that topped analysts’ expectations, saying strong digital sales boosted results, while the retailer continues to make investments to improve its stores.
The department store chain also raised its earnings outlook for the full year, expecting a strong holiday quarter.
Its shares were up as much as 4.5 percent in premarket trading on the news.
Here’s what Macy’s reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
* Earnings per share: 27 cents, adjusted, vs. 14 cents expected
* Revenue: $5.40 billion vs. $5.41 billion expected
* Same-store sales: up 3.3 percent, on an owned plus licensed basis, vs. growth of 2.8 percent expected
“We are ready for the fourth quarter,” CEO Jeff Gennette told CNBC. “I think the backdrop for consumer spending is good, their confidence is strong, the dotcom business is really humming. … For stores, we are going into the fourth quarter in a healthy place with momentum.”
Hoping to avoid the same fate as now-bankrupt Sears, Macy’s has been testing new technology and other concepts in stores to lure shoppers and grow sales.
The department store chain is adding mini marketplaces to some locations to sell goods from lesser-known and local brands. It’s adding virtual reality devices to stores to let shoppers try on make-up virtually or browse the web for furniture while wearing a headset. All of Macy’s stores are also expected to be equipped with mobile checkout by the end of the year.
The company, meanwhile, has been adding its off-price brand, Macy’s Backstage, to existing full-line shops to compete with the likes of TJ Maxx, Nordstrom Rack and Ross Stores. Macy’s has said stores with Backstage see two times more shopping trips, with basket sizes up an average of 30 percent.
Macy’s is also starting to experiment with smaller stores, hoping to trim staffing and inventory costs. Retailers including Kohl’s, Nordstrom and Target have either opened smaller locations or trimmed larger ones in recent months, as more people shop online.
As of Tuesday’s market close, Macy’s shares have rallied more than 80 percent from a year ago.
This is a developing story. Please check back for updates.