Stocks opened lower Wednesday but rose after reports surfaced that the Trump administration may delay a decision to impose tariffs on automobiles and auto parts. The Dow Jones Industrial Average (^DJI -0.14%) and the S&P 500 (^GSPC -0.20%) posted back-to-back gains for the first time in May.
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Macy's is on track, but new tariffs could be a threat
Macy's reported flat sales, but beat expectations for profit in its fiscal first quarter and maintained its outlook for the year. Investors took the results in stride, with shares slipping 0.5%. Net sales fell 0.7% to $5.5 billion, missing the analyst consensus by only $16 million. Adjusted earnings per share dropped 8.3% to $0.44, compared with expectations of a 31% decline to $0.33.
Comparable-store sales including licensed departments increased 0.7%, the same as last quarter and about what the company expected. Macy's was up against a tough comparison with Q1 last year, when comparable sales rose 4.2%. Digital sales had double-digit growth and gross margin fell 80 basis points to 38.2%.
When asked about his view of the consumer on the conference call, CEO Jeff Gennette said that the consumer is healthy, but tailwinds are not as strong as last year. He sounded a warning on tariffs on Chinese imports, though, saying that the company has strategies to mitigate the effects of tariffs that are in effect now, but a new round of tariffs would impact customers.
Tilray grows production, beats pot sales forecasts
Shares of Tilray held steady, rising 0.3% after the Canadian marijuana producer beat estimates for first-quarter revenue and met Wall Street's expectations for losses. Revenue increased 195% to $23 million and the company lost an adjusted $0.27 per share.
The Canadian adult-use marijuana market is supply-constrained, so Tilray can easily sell all it can produce and announced plans to invest in expansion. Kilogram equivalents sold increased 47% over last quarter to 3,012 kilograms, and the company will spend $32.6 million to expand its production and manufacturing footprint 18%, saying that supply balance won't be achieved for another 18 to 24 months -- longer than previously expected. International sales grew 321% year over year.
Tilray reported revenue of $5.6 million from food products thanks to its acquisition of hemp food producer Manitoba Harvest. In the second half of 2019, the company expects to leverage Manitoba's relationships with 16,000 retail locations in the U.S. and Canada to launch products based on cannabidiol (CBD) and co-branded with Authentic Brands Group.