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

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Macy's, Inc. (M - Free Report) is likely to register both top and bottom-line declines from the respective year-ago fiscal quarter’s reported numbers in its third-quarter fiscal 2023 results on Nov 16, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $4,781 million, suggesting an 8.6% drop from the prior-year quarter’s reported figure.

The consensus estimate for quarterly earnings per share has been stable at a penny in the past 30 days. The consensus mark indicates a decline of about 100% from 52 cents a share earned in the year-earlier quarter.

Macy's bottom line surpassed the consensus estimate by 100% in the last reported quarter. M has a trailing four-quarter earnings surprise of 78.8%, on average.

Factors to Note

Soft consumer demand due to the inflationary environment, waning consumer confidence and other macroeconomic pressures is likely to have weighed on Macy’s third-quarter fiscal 2023 performance. Markdowns to optimize inventory levels within the overstock categories and the possibility of an elevated promotional environment are expected to have hurt margins and the bottom line. These weaknesses, coupled with any deleveraged selling, general & administrative expenses, are likely to have hit the company’s performance in the quarter under review.

On its last earnings call, management had projected net sales to be $4.75-$4.85 billion for the fiscal third quarter. It had envisioned adjusted earnings per share to be in the range of a loss of three cents per share to earnings of two cents per share for the same quarter. Management expects the gross margin to improve by at least 140 basis points year over year for the fiscal third quarter.

Despite the aforementioned headwinds, we expect Macy’s solid execution of the Polaris strategy, robust omnichannel capabilities, curated merchandise assortment and initiatives to provide customers with a seamless shopping experience to likely have provided some cushion to the quarterly performance.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict 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, as you can see below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Macy's, Inc. Price and EPS Surprise.
 

 

Macy’s currently has an Earnings ESP of -774.3% and a Zacks Rank of 3.

Stocks Poised to Beat Earnings Estimates

Here are a few companies, which according to our model, have the right combination of elements to come up with an earnings beat this reporting cycle:

Build-A-Bear Workshop (BBW - Free Report) currently has an Earnings ESP of +0.66% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for third-quarter fiscal 2023 earnings per share is pegged at 51 cents, flat year over year.

Build-A-Bear Workshop’s top line is expected to increase year over year. The consensus estimate for quarterly revenues is pegged at $107.6 million, which indicates an increase of 3% from the figure reported in the prior-year quarter. BBW has a trailing four-quarter earnings surprise of 21.6%, on average.

Costco (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank of 2. COST is likely to register a bottom-line increase when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.43 suggests an increase of 10.7% from the year-ago fiscal quarter’s reported number.

Costco’s top line is expected to improve from the prior-year fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $57.7 billion, suggesting growth of 6% from the prior-year fiscal quarter’s reported figure. COST has a trailing four-quarter earnings surprise of 2.1%, on average.

NIKE (NKE - Free Report) currently has an Earnings ESP of +0.45% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for NKE’s quarterly earnings per share of 85 cents remains flat year over year.

NIKE has a trailing four-quarter earnings surprise of 27.1%, on average. The consensus estimate for NKE’s quarterly revenues is pegged at $13.4 billion, indicating a rise of 0.7% from the figure reported in the prior-year quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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