Macy's, Inc. (NYSE:M) shares rose in Thursday premarket trading after the department store chain reported positive third-quarter earnings and raised its full sales guidance.
A 6% year-over-year decline in merchandise inventories and a 160 basis point improvement in its gross margin to 40.3% helped drive the better-than-expected results.
Revenue for the quarter declined 7% to $4.68 billion but was above the $4.82 billion expected by Wall Street analysts.
It achieved adjusted diluted earnings per share (EPS) of $0.21, down 60% but above the consensus estimate of analysts surveyed by Zacks Investment Research for $0.
“We delivered better-than-expected top and bottom-line third-quarter results and are entering the holiday period in a healthy inventory position,” Macy’s chairman and CEO Jeff Gennette commented in a statement.
"We have refined our gift assortment, simplified our promotions and improved our shopping experience.”
The company now expects full-year sales of between $22.9 billion and $23.2 billion, raising the lower end of the range from the $22.8 billion it expected in August.
It also tightened its guidance for adjusted diluted EPS to between $2.88 and $3.13 from $2.70 to $3.20 previously.
Macy’s shares jumped 7.7% to $13.58 ahead of the opening bell.
Contact the author at stephen.gunnion@proactiveinvestors.com