Retailer operator Macy’s, Inc. (NYSE:M), with nearly $21 billion in market cap, reported second-quarter earnings that turned out to be weaker than what analysts did expect for the quarter and the stock was trending down more than 4.2% in the morning session. Jim Cramer and ‘Squawk Box’ team on CNBC talked about the stock and the lackluster earnings, which also revealed analysts being “dead wrong” on the stock with their recommendations just a few days before the earnings were released.
Macy’s, Inc. (NYSE:M) reported second-quarter net income of $292 million or $0.80 a share. That was better than $281 million or $0.72 a share that was there in the same quarter in the prior year. However, the bottom line missed the consensus estimate of $0.86 a share for the quarter. The company went on to report revenue of $6.27 billion, which was up 3.3% from $6.07 billion in the second quarter of 2013. However, the increase in revenue was not good enough to match expectations at $6.29 billion.
Macy’s, Inc. (NYSE:M)’s second-quarter figures did come as a surprise, because Cramer pointed out that at least three firms upgraded their targets on the stock just about 10 days before the earnings. He said they were “obviously mistaken” given what came out from the company’s own report.
“[…] The stock should not have been hiked as much as it did, be careful; those guys got it dead wrong,” said Cramer.
In the troubled quarter, Macy’s, Inc. (NYSE:M) pointed out that a choppy economy that has hurt spending, forced them to try to win customers through discounts and promotional events, which eventually impacted their bottom line.
As to whether there are challenges in the market, Cramer said he felt things should be better by now.
“[…] It is a difficult world because we have food prices coming down, we have natural gas prices have gone down – that is electric bill, and we have gasoline going down. So it should be a better time. I want to wait and see what JC Penny says on Friday […],” he said.