NEW YORK, United States — Macy’s Inc. posted a surprise sales gain last quarter and sees the momentum carrying into 2018, renewing investors’ optimism in the battered department-store chain.
Total comparable sales — a key benchmark — rose 1.4 percent in the fiscal fourth quarter, which includes the holiday season. Analysts had predicted a 0.6 percent decline. The shares surged as much as 13 percent in early trading after the results were posted.
The results mark a major milestone for the Cincinnati-based chain, which had suffered 11 straight quarters of comparable-sales declines. Chief Executive Officer Jeff Gennette, who took the helm at Macy’s last year, has vowed to bring shoppers back by opening more off-price locations, closing underperforming stores and reducing superfluous inventory.
Macy's CEO has vowed to bring shoppers back by opening more off-price locations, closing underperforming stores and reducing inventory.
The turnaround strategy now looks to be bearing fruit. The company expects comparable sales to range between the break-even point and 1 percent growth this year.
“We are encouraged to see a trend improvement in our brick-and-mortar business,” Gennette said in a statement Tuesday.
The stock climbed as high as $31.11 in premarket trading. Before the rally, the shares were up 9 percent this year.
Fourth-quarter net sales amounted to $8.67 billion, matching analysts’ estimates. Excluding some items, profit was $2.82 a share in the period, which ended February 3.
Falling foot traffic at malls and a broader slump in apparel has waylaid the department-store industry for years. Shares of Macy’s plunged 30 percent in 2017 as investor pessimism deepened.
By Lindsey Rupp, Editors: Nick Turner, Lisa Wolfson