Macy’s (NYSE:M) posted a stronger-than-expected 22% rise in third-quarter profits on Wednesday as the department-store operator generated steady same-store sales growth.
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The iconic retailer cited a robust October performance as well as more emphasis on marketing.
Wall Street cheered the earnings beat, bidding shares of Macy's 8% higher in premarket trading.
Macy’s said it earned $177 million, or 47 cents a share, last quarter, compared with a profit of $145 million, or 36 cents a share, a year earlier. Analysts had been calling for EPS of 39 cents.
Revenue rose 3.3% to $6.28 billion, which is slightly ahead of the Street’s view of $6.19 billion. Same-store sales increased 3.5%
“We were able to achieve a very successful third quarter of 2013, despite the tepid economic climate,” Macy’s CEO Terry Lundgren said in a statement.
Now investors are turning their attention to how Macy’s performs during the pivotal holiday-shopping season, during which it plans to hire 83,000 seasonal associates to support the burst of activity.
In a positive sign, Macy’s said it is reaffirming its call for full-year EPS of $3.80 to $3.90 on same-store sales growth of 2% to 2.9%. Even the low end of that EPS range would top forecasts from analysts for just $3.78.
“Our business improved during the quarter, with particular strength in October, so we are entering the fourth quarter with confidence,” Lundgren said.
Shares of Cincinnati-based Macy’s advanced 7.77% to $49.93 in premarket trading on Wednesday, positioning them to build on their 2013 gain of about 19%.