Executive Summary

• Macy’s reported FY1Q16 adjusted EPS of $0.40 versus consensus of $0.38.
• Reported total sales were $5.77B, below consensus of $5.93B and down 7.4% from the same period in 2015. Management saw weak spending in apparel and related categories driven by a sharp 20% decrease in international tourist spending.
• With top-line sales now planned below initial expectations, the company now expects adjusted EPS to be $3.15-$3.40 versus its initial guidance of $3.80-$3.90.