Macy’s Inc. on Wednesday reported a surprise rise in quarterly same-store sales, topping estimates for the third straight quarter, boosted by strong performance across its businesses.
The company’s stock fell nearly 5 percent in premarket trading. Its shares have surged 66 percent to $41.82 this year and have more than doubled since their November low of $17.40.
Sales at Macy’s stores open more than 12 months, including sales in departments licensed to third parties, rose 0.50 percent, compared with the average analyst estimate of a 0.90 percent drop, according to Thomson Reuters I/B/E/S.
Department stores have been struggling with falling mall traffic and tough competition from off-price retailers and Amazon.com Inc. In response, Macy’s has closed stores, tightly controlled inventory, built its Backstage discount business and monetized prime real estate properties.
“Macy’s, Bloomingdale’s and Bluemercury all performed well. It is encouraging to see the continued strengthening of our brick & mortar business where we saw trend improvements across the portfolio,” Chief Executive Officer Jeff Gennette said in a statement.
Excluding one-time items, the company earned 70 cents per share, much higher than analysts’ expectations of 51 cents.
Net income attributable to Macy’s shareholders rose to $166 million, or 53 cents per share, in the second quarter ended Aug. 4 from $111 million, or 36 cents per share, a year earlier.
Net sales fell 1.1 percent to $5.57 billion, but still topped estimates of $5.55 billion.
The company also raised its full-year profit and sales target.
Shares of rival department store operators J.C. Penney Co Inc, Nordstrom Inc and Kohl’s Corp also fell after the report.
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