Macy's and SodaStream Post Weak Sales As Dow Drops

Earnings season kicked off for retailers, with Macy's and SodaStream reporting this morning. Meanwhile, the Dow dove as small-cap stocks sold off.

May 14, 2014 at 10:00PM

After two straight record-setting days to start the week, stocks fell back today on a slide led by small-cap and retail stocks. By the end of the day, the Dow Jones Industrial Average (DJINDICES:^DJI) finished down 101 points or 0.6%, while the S&P 500 fell 0.5% and the Nasdaq dropped 0.7%.

In today's economic news, the producer price index jumped last month, rising 0.6% on a surge in food prices. It was the largest monthly increase in wholesale prices in a year and a half and a possible sign that inflationary concerns may be returning as the economic recovery picks up. Analysts had expected an increase of just 0.2% following a significant uptick in March of 0.5%. Year over year, prices increased 2.1%, the biggest jump in the category in two years. Tomorrow's consumer price index release will shed light on the wholesale jump's effect on prices at the retail level, though economists believe the labor market has further to recover before consumers can support a significant increase in prices. 

Macy's (NYSE:M) kicked off retail earnings this morning, posting a sales decline of 1.7% to $6.28 million, missing expectations of $6.46 billion, as comparable sales fell 1.6%. Management blamed the drop on poor winter weather, a familiar excuse, though they said growth returned in April as cold-weather regions thawed out. Despite the drop in revenue, Shares finished essentially unchanged as its profit jumped from $0.55 per share to $0.60, beating estimates by a penny, thanks to cost-cutting measures and share buybacks. Further sweetening the deal for investors was the company's announcement of a 25% dividend increase to $0.3125 a quarter, good for a 2.2% yield. Macy's also increased its share buyback authorization by $1.5 billion. While other department-store chains are struggling, Macy's commitment to returning capital to investors is just one more reason it should continue being a winner in that sector. The retailer also reaffirmed its full-year guidance of a comparable sales increase of 2.5%-3% and an EPS forecast of $4.40-$4.50, in line with estimates at $4.48, showing that the winter freeze was just a speed bump. 


Source: Fool Flickr.

Elsewhere, SodaStream (NASDAQ:SODA) delivered a mostly flat earnings report this morning, and shares finished down 1.2%. The maker of the at-home soda machine continued to see problems as earnings dove from $0.57 a share a year ago to just $0.08 a share on increased marketing expenses and weak U.S. sales. Still, that figure beat analyst estimates of just a penny profit per share. Revenue improved just 0.5% to $118.2 million, in line with expectations at $118 million. CEO Daniel Birnbaum blamed the 28% drop in U.S. sales on a weak holiday season, creating excess retailer inventory. SodaStream's guidance for the year wasn't as bad as the company sees revenue growth of 15% for the year, but just a 3% improvement in net income. Both projections were better than analyst estimates but are reflective of SodaStream's growing pains. If the company hopes to live up to its earlier promise as a transformative product, it will need to find a way to recharge U.S. sales. 

Macy's has grown its dividend six times in the past three years. Here are some other top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Jeremy Bowman owns shares of SodaStream. The Motley Fool recommends and owns shares of SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers