- Macy's reported its first quarterly profit in a year, thanks to its efforts to cut inventory levels and rely less on deep discounting over the holidays.
- But same-store sales fell 17.1% from a year earlier, despite Macy's booking double-digit growth online.
- Macy's said 2021 will be a year for recovery and rebuilding.
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 year for recovery and rebuilding, 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 retailers, Macy's has been hurt as shoppers working from home and attending fewer social events make fewer trips to the mall during the health crisis and purchase less clothing.
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 earlier, better than the $6.5 billion that analysts were expecting.
Macy's said 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 said 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 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 annual online sales will eclipse $10 billion within three years, as the department store operator anticipates that shoppers' preference for internet purchases will stick beyond the pandemic.
Macy's is in the midst of pruning its real estate, too, to keep better-preforming stores in America's top malls open. 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 $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.
Read the full press release and materials from Macy's here.
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