Macy’s stock pops premarket after earnings top estimates, but company lowers guidance to reflect difficult environment

Macy’s Inc.
M,
-4.07%
share rose 3.6% in premarket trade Tuesday, after the company posted better-than-expected earnings for the second quarter, although it lowered its full-year guidance to reflect a difficult spending environment and high levels of inventory. The department store chain posted net income of $275 million, or 99 cents a share, in the quarter, down from $345 million, or $1.08 a share, in the year-earlier period. Adjusted per-share earnings came to $1.00, ahead of the 86 cent FactSet consensus. Sales edged down to $5.600 billion from $5.647 billion a year ago, but were also ahead of the $5.490 billion FactSet consensus. Same-store sales fell 1.6%, compared with a FactSet consensus for a drop of 2.0%. The company cut guidance to reflect “the risk it sees in the continued deterioration of consumer discretionary spending in some of its categories and the level of inventory within the industry, as well as risks associated with a more pronounced macro downturn.” It’s now expecting full-year sales of $24.340 billion to $24.580 billion, compared with a May forecast of $24.460 billion to $24.700 billion. It expects adjusted EPS of $4.00 to $4.20, down from May guidance of $4.53 to $4.95. Shares have fallen 29% in the year to date, while the S&P 500
SPX,
-2.14%
has fallen 13%.