Investing.com - Macy's (NYSE:M) shares rallied in premarket trade on Tuesday, after the retailer announced a new restructuring plan aimed at saving $100 million a year in costs.
For the fourth quarter, Macy's reported adjusted earnings per share of $2.73 on revenue of $8.46 billion. Analysts polled by Investing.com expected the company to report a profit of $2.53 a share on revenue of $8.44 billion.
The figures come as a relief after Macy's had warned of a disappointing holiday season and cut its guidance for 2019 at the start of the year. Even so, it now expects full-year 2019 earnings per share in a range between $3.05 to $3.25, compared to expectations of full-year EPS of $3.25.
Macy's stock rose 3.2% in response to $25.15.
In the fourth quarter, same-store sales on an owned basis rose 1.7%, while same-store sales on an owned-plus-licensed basis increased 2.0%. The company said it expects same-store sales in fiscal 2019 could rise by around 1%.
Organic sales growth would represent an achievement, as department stores continue to struggle to find ways to cope with declining mall traffic amid tough competition from online seller Amazon.com (NASDAQ:AMZN).
A backdrop of slowing global economic growth, the government shutdown and lower-than-expected tax refunds are also currently clouding the outlook for U.S. brick-and-mortar retailers.
“We've become pessimistic about the sustainability of Macy’s turnaround and the retail environment in general; many of the tailwinds that were supporting retailers last year are weakening in 2019 and we see the risks to the downside growing,” Investing.com analyst Haris Anwar warned.
Macy’s Inc follows other major Services sector earnings this month
On January 31, Amazon.com reported fourth quarter EPS of $6.04 on revenue of $72.38B, compared to forecasts of EPS of $5.65 on revenue of $71.88B.
Alibaba earnings beat analyst's expectations on January 30, with third quarter EPS of $12.19 on revenue of $117.28B. Investing.com analysts expected EPS of $11.45 on revenue of $119.03B
Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com's earnings calendar