Executive Summary

• Macy’s reported 4Q15 EPS of $2.09, excluding items, versus the consensus estimate of $1.89.
• Total revenue was $8.87 billion versus consensus of $8.83 billion. Comps were down 4.8% on an owned basis and down 4.3% on an owned and licensed basis. Sales trends improved in January as the weather turned colder in the Northern region.
• FY16 guidance calls for EPS of $3.80–$3.90 versus expectations of $3.90. That is based on a 2% decline in total revenue, implying total revenues of $26.54 billion versus consensus of $26.48 billion. Comps on an owned and licensed basis are expected to decline by 1%, while comps on an owned basis are expected to be down 50 basis points.