Macy’s, Inc. (M - Free Report) delivered the seventh straight quarter of positive earnings surprise when it reported fourth-quarter fiscal 2018 results. Management hinted that while the company registered positive comparable sales, results failed to live up to expectations. Nonetheless, the company witnessed double-digit growth in the digital business.

The company highlighted that going forward it will embark on Backstage, Vendor Direct, Store Pickup, Loyalty Program, Growth50 stores, ‘mobile first’ strategy and Destination Businesses to drive growth. The company plans to double the number of Market @ Macy’s, a store-within-a-store retail concept. This Zacks Rank #3 (Hold) company has undertaken restructuring actions that are likely to result in annual cost savings of $100 million.

Let’s Delve Deeper

Macy’s posted adjusted earnings of $2.73 per share that comfortably beat the Zacks Consensus Estimate of $2.51 but declined 4.2% from the year-ago period. The year-over-year fall in earnings may be attributed to lower net sales. This Cincinnati, OH-based company generated net sales of $8.46 billion that decreased 2.5% year over year.

Comparable sales (comps) on an owned plus licensed basis rose 0.7%, while on an owned basis, the metric improved 0.4%. This marked the fifth straight quarter of comps growth for the company. Strategic investments across stores, technology and merchandising aided comparable sales growth.

Adjusted EBITDA declined 16.1% to $1,399 million, while adjusted EBITDA margin contracted 270 basis points to 16.5%.

Other Financial Aspects

Macy’s ended the quarter with cash and cash equivalents of $1,162 million, long-term debt of $4,708 million, and shareholders’ equity of $6,436 million.

FY19 View

Macy’s now anticipates fiscal 2019 net sales to be roughly flat with both comps on an owned plus licensed basis and comps on an owned projected to be flat to up 1%. Management now envisions adjusted earnings in the range of $3.05-$3.25 per share for fiscal 2019, down from $4.18 reported in fiscal 2018. The Zacks Consensus Estimate for the fiscal year is pegged at $3.25, which is likely to witness a revision in the coming days.