Shares in Macy’s Inc (NYSE:M) soared in pre-market trading on Tuesday after the department store chain topped Wall Street forecasts with its fourth-quarter earnings and sales.
The stock was up 9.3% to US$30 shortly after 8am.
Adjusted earnings came in at US$2.82 per share in the three months ended December 31 2017, compared to estimates of US$2.71.
Same-store sales - a key metric for retailers which strips out the impact of new or closed stores - rose 1.3% during the period, whereas analysts had only pencilled in growth of 0.1%.
There was a slight miss on the revenue front, but only marginally: sales totalled US$8.67bn versus US$8.68bn which Street number crunchers had forecast.
Perhaps the most encouraging news for investors came in the guidance for 2018.
Chief executive Jeff Gennette has said in the past that his aim is to get the retailer - which also owns the Bloomingdale’s chain - back to same-store sales growth during his tenure.
Total sales are expected to be down by between 0.5% and 2% this year, reflecting the closure of certain locations as Macy’s looks to trim its massive store estate and cut costs.
But same-store sales are expected to be flat to up 1%.
The upbeat guidance comes off the back of a hot start to the year, as the strong trading seen over the holiday period rolled over into 2018.
Like most of its peers, Macy’s has benefitted from the colder weather and snowstorms which have hiked demand for winter apparel and accessories.
“Consumer spending was strong in the fourth quarter, and we were ready with improved execution and great products across all categories,” said CEO Gennette.
“We were disciplined with our promotional cadence and maintained a good inventory position. We head into 2018 with an improved base business, healthy inventories, a focused and engaged organization and a clear path to return Macy's to growth.”