People wear facemasks as they walk through Herald Square on January 8, 2021 in New York City.
Angela Weiss | AFP | Getty Images
Macy’s on Tuesday reported its first quarterly profit in a year, as its efforts to slash inventories during the holidays and rely less on deep discounting paid off.
The company said it expects 2021 to be a recovery and rebuilding year, as it claws its way back from the losses it has suffered during the pandemic. It offered an outlook that anticipates continued pandemic-related obstacles during the spring, with momentum escalating in the back half of 2021.
Like many of its peers, Macy’s has been hurt by shoppers taking fewer trips to the mall during the health crisis, and purchasing less clothing as they work from home and attend fewer special events.
Macy’s shares were up more than 3% in premarket trading.
Here’s how the company did during the fourth quarter ended Jan. 30, compared with what analysts were anticipating, based on a poll by Refinitiv:
- Earnings per share: 80 cents, adjusted, vs. 12 cents, expected
- Revenue: $6.78 billion vs. $6.5 billion, expected
Net income fell to $160 million, or 50 cents per share, from $340 million, or $1.09 per share, a year earlier. Excluding one-time charges, the company earned 80 cents per share, better than the 12 cents expected by analysts.
Sales fell to $6.78 billion from $8.34 billion a year ago. That came in better than the $6.5 billion that analysts were expecting.
Macy’s said its same-store sales, on an owned plus licensed basis, fell 17.1% from 2019 levels. Analysts were calling for a 21.3% drop, according to Refinitiv data.
CEO Jeff Gennette remarked the company saw the most strength in home, beauty, jewelry and watches during the quarter, as consumers diverted more of their spending away from clothes and fancy shoes, and more toward accessories and items to dress up their homes.
E-commerce sales were up 21% in the latest period. The company said digital sales accounted for 44% of net sales, while roughly a quarter of Macy’s digital sales were fulfilled from its stores during the quarter.
Macy’s said it expects its annual online sales will eclipse $10 billion within the next three years, as the department store operator anticipates shoppers’ habits of buying more on the internet will stick beyond the pandemic.
Macy’s is in the midst of pruning its real estate, too, to keep what it says are its better-preforming stores in America’s best malls open for business. In 2019, the company said it would shut 125 locations by 2023. Earlier this year, Macy’s released the locations of more than 40 stores to shut by mid-2021, as part of its three-year closure plan.
Looking to fiscal 2021, Macy’s is calling for sales to fall within a range of of $19.75 billion to $20.75 billion. Analysts had been calling for annual revenue of $20.13 billion.
It expects adjusted earnings per share to fall within a range of 40 cents to 90 cents. Analysts had forecast adjusted earnings of 77 cents a share.