Macy’s Inc. is entering the Thanksgiving-to-Christmas shopping season with a new spring in its step, having handily beaten Wall Street expectations with a 31% surge in its fiscal third-quarter profit.
In the three-month period ended Nov. 2, the department chain's earnings soared to 47 cents a share from 36 cents in the same period a year earlier. Net income rose to $177 million from $145 million.
Terry Lundgren, Macy's chief executive, said in a statement that the company was "entering the fourth quarter with confidence."
It's a telling statement, considering that the holidays — which account for as much as 40% of a retailer's annual sales — can cushion some companies for months afterward or render others investor pariahs.
This year the pressure is even heavier because retailers have only four weekends between the two holidays to push their merchandise, compared to five last year.
Macy's, which also owns the Bloomingdale's brand, said it intensified its marketing strategies in the third quarter and boosted its omnichannel efforts, helping shoppers move seamlessly from digital to brick-and-mortar consumption.
Same-store sales at units open at least a year rose 3.5%. Overall revenue jumped 3.3% to $6.3 billion.
The company maintained its projections from August, predicting that same-store sales would be up 2.5% to 4% in the second half of the year.
In afternoon trading in New York, Macy's stock was up 9.6%, or $4.42, to $50.76 a share.
In a report titled "Macy's Magic Continues," Macquarie Capital analyst Liz Dunn wrote that "the shortened holiday selling period is expected to create a more intense selling season which we believe will be more promotional."
Rival Nordstrom reports its earnings Thursday.