Shares of Macy's, Inc. (NYSE:M), one of the nation's premier retailers with roughly 690 department stores under its Macy's and Bloomingdale's nameplates (and other stores under different brands), are down 6% as of 3:25 p.m. EST Wednesday, although the company released solid third-quarter results.
Revenue during the third quarter totaled $5.40 billion, higher than the prior year's $5.28 billion and in line with analysts' top-line estimates. Adjusted earnings per share checked in at $0.27, higher than the prior year's $0.21 per share and well ahead of analysts' estimates calling for $0.15 per share. Investors were also pleasantly surprised that same-store sales on an owned basis increased 3.3%, higher than analysts' estimates for growth of 2.6%.
Macy's chairman and CEO Jeff Gennette said in a press release:
We are pleased with Macy's, Inc. performance in the third quarter, marking our fourth consecutive quarter of comparable sales growth. Macy's, Bloomingdale's and Bluemercury all performed well. Our strategic initiatives are gaining momentum and delivering results.
Third-quarter results were certainly positive for investors, especially considering the result was partially driven by strong digital business, a critical component for retailer growth stories. Perhaps more important to investors was management's optimism heading into the critical holiday season: Macy's bumped its full-year sales growth guidance to a range of 0.3% to 0.7% from the prior guidance of flat to 0.7%, and bumped the low end of same-store sales guidance higher by 20 basis points to 2.3%.
Macy's, which has shuttered over 100 locations and cut jobs in recent years, still faces challenges with its brick-and-mortar stores. But with a strong third-quarter result and momentum heading into the holiday season, investors should take today's decline with a grain of salt -- it was a solid quarter.