Holiday spending pushes Macy's (NYSE: M) 4Q profit higher

Orlando, FL 2/21/12 (StreetBeat) -- Macy's Inc. (NYSE: M) said strong holiday and online sales helped push its fiscal fourth-quarter net income up 12 percent. The department store chain's results topped Wall Street's expectations and its stock climbed in trading before the market open.

Macy's, which runs Bloomingdale's and its namesake stores, is reaping the benefit of tailoring merchandise to local markets. It has been outperforming mid-price peers such as Kohl's Inc. and J.C. Penney Co (NYSE: JCP).

"Our year was punctuated with a terrific holiday selling season as our customers responded to our assortment of most-wanted merchandise for gifts and self-purchase, as well as compelling marketing campaigns," Chairman, President and CEO Terry Lundgren said in a statement.

Macy's stock added $1.19, or 3.3 percent, to $37.44 Tuesday morning.

Macy's earned $745 million, or $1.74 per share, for the period ended Jan 28. A year ago it earned $667 million, or $1.55 per share.

Excluding gains from the sale of store leases related to the 2006 sale of Lord & Taylor and expenses tied to some store closings, earnings were $1.70 per share.

Revenue rose 5.5 percent to $8.72 billion from $8.27 billion. Online sales, which include results from both the Macy's and Bloomingdale's web sites, jumped 40 percent.

Revenue at stores open at least a year, which includes online sales, climbed 5.2 percent. This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

The quarterly results topped the expectations of analysts polled by FactSet, who predicted earnings of $1.65 per share on revenue of $8.7 billion.

For the year, Macy's earned $1.26 billion, or $2.92 per share. That compares with earnings of $847 million, or $1.98 per share, in the previous year. Adjusted earnings were $2.88 per share.

Full-year revenue increased 5.6 percent to $26.41 billion from $25 billion. Online sales rose nearly 40 percent.

Revenue at stores open at least a year increased 5.3 percent.

The company, which has corporate offices in Cincinnati and New York, expects fiscal 2012 earnings of $3.25 to $3.30 per share. Wall Street predicts $3.27 per share.

Macy's also anticipates its online sales will surpass $2 billion in 2012 and that revenue at stores open at least a year will climb about 3.5 percent.

Macy's has about 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.

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J.C. Penney Buys Martha Stewart Living Stake in Plan to Open Mini-Stores

Orlando, FL 12/7/11 (StreetBeat) --J.C. Penney Co. (NYSE:JCP) acquired a 17 percent stake in Martha Stewart Living Omnimedia Inc. (NYSE:MSO) for $38.5 million as the U.S. department-store chain seeks to revive sales with new mini stores dedicated to the brand.

J.C. Penney agreed to pay $3.50 a share for the stake, 12 percent more than Martha Stewart Living’s closing price yesterday, according to a joint statement today. The Plano, Texas-based retailer will also obtain two board seats on Martha Stewart Living’s board.

The agreement marks J.C. Penney Chief Executive Officer Ron Johnson’s first strategic move since he took over in November after running Apple Inc.’s retail operations. Johnson, who helped introduce Apple’s (Nasdaq:AAPL) big-city stores, is seeking to revive sales after the department-store chain last month posted its first quarterly loss in two years as shoppers deferred purchases.

“It’s definitely outside the box of what they’ve historically done,” Liz Dunn, at analyst at Macquarie Group in New York, said in an interview. “It’s certainly interesting and points to a strategy with the new management of kind of going after different brands and better products.”

Martha Stewart Living surged 22 percent to $4.14 at 10:52 am in New York, after earlier reaching $4.30 for the biggest intraday gain since July 2004. J.C. Penney fell 0.9 percent to $33.

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Martha Stewart Living will gain more than $200 million in revenue from the 10-year agreement, according to the statement. The owner of the namesake magazine and TV show is trying to boost sales growth after three years of falling revenue, and had hired Blackstone Group LP this year to help review proposals from potential investors.

The mini stores, which will sell home and lifestyle merchandise, are scheduled to begin opening in J.C. Penney stores in February 2013. The stores will have trained sales associates who can provide “educational tips.” The two companies will also develop and introduce an e-commerce site.

Since his appointment in June, Johnson has brought in Michael Francis, a former colleague at Target Corp. (NYSE:TGT), to head marketing efforts. Last month, he also announced the appointment of two former Apple executives as chief operating officer and chief talent officer.

J.C. Penney reported a net loss of $143 million, or 67 cents a share, in the fiscal third quarter ended Oct. 29 compared with profit of $44 million, or 19 cents, a year earlier, according to a statement Nov. 14. The company had last reported a loss in the quarter ended August 2009.

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