Macy's Stock Breaks Out Into Buy Range As Earnings Crush; Kohl's Jumps

Macy’s (M) and Kohl’s (KSS) crushed earnings views for the second quarter and the department-store chains guided significantly higher. Macy’s stock surged into buy range even as Amazon (AMZN) reportedly plans its own large-format stores.




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The e-commerce giant has plans to open the first such stores in Ohio and California, according to the Wall Street Journal, which put them at about 30,000 square feet. That’s about the size of a Kohl’s store but a third the size of a traditional department store.

Macy’s Earnings

Estimates: Wall Street expected Macy’s to swing to Q2 earnings of 23 cents per share from a loss of 81 cents a year ago, according to FactSet. Revenue was seen rising 41% to $5.01 billion, as Macy’s laps the pandemic hit a year ago. Same-store sales were seen increasing 43.6%, down from a 62.5% gain in the prior quarter, FactSet says.

Results: Macy’s earnings of $1.29 a share on revenue of $5.65 billion. In Q2, same-store sales rose 61.2%. Digital sales fell 6% year on year but rose 45% vs. Q2 2019.

Macy’s reinstated its quarterly dividend of 15 cents a share and announced a $500 million share repurchase program.

Outlook:  Macy’s projects full-year 2021 EPS of $3.41-$3.75 vs. $1.71-$2.12 prior. It forecasts full-year sales of $23.55 billion-$23.95 billion vs. $21.73 billion-$22.23 billion prior. Analysts expect 2021 EPS of $2.36 and revenue of $22.09 billion, according to FactSet.

Stock: Shares jumped 17% to 21.15 on the stock market today. Macy’s stock has cleared a 20.47 handle buy point in a pattern around the 50-day line, according to MarketSmith chart analysis. The relative strength line has flattened out after a solid uptrend. Dillard’s (DDS), which crushed earnings views Aug. 12, rose 2.3%. Amazon stock added 0.7%.

Kohl’s Earnings

Estimates: Wall Street expected Kohl’s to swing to earnings $1.26 per share from a loss of 25 cents a year ago, according to FactSet. Revenue was seen rising 23% to $3.96 billion, as Kohl’s too laps the pandemic hit a year ago. Same-store sales were seen increasing 23.8%, down from a 69.5% gain in the prior quarter, FactSet says

Results: Kohl’s earnings of $2.48 a share on revenue of $4.45 billion, with same-store sales up 25%.

Outlook: The retailer projects 2021 EPS of $5.80-$6.10, excluding any non-recurring charges, vs. $3.80-$4.20 prior. It forecasts sales growth in the low-twenties range vs. mid-to-high teens prior. Analysts were expecting 2021 EPS of $4.45 and revenue of $18.123 billion, up 20.6% year on year, according to FactSet.

Kohl’s plans $500 million to $700 million of stock buybacks in 2021.

Stock: Shares leapt 8.3% to 56.15. Kohl’s stock offers a 57.53 early entry for aggressive investors, above the Aug. 12 high, according to MarketSmith chart analysis. The relative strength line is trending lower, a negative.

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Roy Walsh

Roy Walsh

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