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Macy's (M) to Report Q3 Earnings: What's in the Offing?

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Macy's, Inc. (M - Free Report) is likely to register a decrease in the top line when it reports third-quarter fiscal 2020 numbers on Nov 19, before the market open. The Zacks Consensus Estimate for revenues is pegged at $3,840 million, suggesting a decline of about 25.8% from the prior-year reported figure.

In fact, the Zacks Consensus Estimate for the bottom line stands at a loss of 81 cents that was stable over the past 30 days. In the year-ago period, the company had reported earnings of 7 cents a share.

Notably, this omni-channel fashion retailer has delivered an earnings surprise of 169.4% in the last four quarters, on average.

Factors to Note

Macy's is not immune to the ill impacts of the coronavirus outbreak. The company’s third-quarter results are likely to reflect the possibility of pockets of COVID-19 resurgence and slower recovery of stores in urban areas. Further, the decline in tourism owing to the pandemic is likely to have hit the top line in the to-be-reported quarter. Also, a slower back-to-school season remains a headwind.

As the company’s stores continue to ramp up, management anticipated a higher SG&A rate in the back half of the fiscal. For the fall season, management guided SG&A rate to be low-to-mid single digit percentage points higher than the prior-year period.

However, the company’s third-quarter results are likely to somewhat reflect gains from the Polaris Strategy. The strategy includes strengthening customer relationships, expansion of assortments, accelerate digital growth, optimizing store portfolio and reducing costs.

Also, the company’s curbside-pickup services have been receiving positive response from customers. For Backstage, management expected recovery in sales to improve in the quarter under review on stronger trends in home, casual, and basics.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Macy’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Macy's, Inc. Price and EPS Surprise

Macys, Inc. Price and EPS Surprise

Macy's, Inc. price-eps-surprise | Macy's, Inc. Quote

 

Macy’s has a Zacks Rank #3 and an Earnings ESP of +12.65%.

Other Stocks with Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:

Dollar General Corporation (DG - Free Report) currently has an Earnings ESP of +16.53% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK’S Sporting Goods, Inc. (DKS - Free Report) currently has an Earnings ESP of +16.18% and a Zacks Rank #3.

Lowe’s Companies, Inc. (LOW - Free Report) presently has an Earnings ESP of +7.78% and a Zacks Rank #3.

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