Should you buy Macy’s stock on strong Q4 results?

Shares of Macy’s Inc (NYSE: M) are up more than 10% on Thursday after reporting a strong fourth quarter and offering upbeat guidance for the future.

Analyst shares his view on Macy’s stock

For the full financial year, Macy’s now expects its per-share earnings to fall between $3.67 and $4.11 on up to $24.2 billion in revenue. On CNBC’s “Squawk Box”, Cowen’s Oliver Chen said:

Experts had forecast $3.78 a share and $24.2 billion revenue, respectively. Versus its year-to-date high, Macy’s stock is still down about 5.0%.

Notable figures in Macy’s Q4 earnings report

• Net income printed at $508 million versus the year-ago $742 million
• Per-share earnings also tanked significantly from $2.44 to $1.83
• Adjusted EPS came in at $1.88 as per the earnings press release
• Sales declined nearly 5.0% on a year-over-year basis to $8.264 billion
• FactSet consensus was $1.58 of adjusted EPS on $8.234 billion revenue
• Comparable sales (owned plus licensed stores) slipped 2.7% YoY
• Net credit card revenue was about $2.0 million lower than last year

Markdowns and promotions resulted in a 240 basis points hit to gross margin in the recent quarter. Still, Chen added: