People wear masks as they walk through Herald Square on January 8, 2021 in New York City.
Angela Weiss | TBEN | Getty Images
Macy’s reported its first quarterly profit in a year on Tuesday, as its efforts to reduce inventory over the holidays and rely less on large discounts paid off.
The company said it expects 2021 to be a year of recovery and rebuilding, as it recovers from the losses it suffered during the pandemic. It offered a perspective that anticipated the hurdles of the pandemic to continue in the spring, with momentum accelerating in the second half of 2021.
Like many of its peers, Macy’s suffered as shoppers went to the mall less during the health crisis and bought less clothes when working from home and attending fewer special events.
Macy’s shares rose more than 3% in pre-market trading.
Here’s how the company did in the fourth quarter ended Jan. 30, compared to what analysts expected, 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-off fees, 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. This exceeded the $ 6.5 billion expected by analysts.
Macy’s said its same-store sales, on a plus-licensed basis, fell 17.1% from 2019 levels. Analysts were calling for a 21.3% drop, according to data from Refinitiv.
CEO Jeff Gennette noted that the company saw the most strength in home, beauty, jewelry and watches during the quarter, with consumers shifting more of their spending away from luxury clothing and footwear, and more to accessories and articles to dress their houses.
E-commerce sales have grown 21% in the most recent period. The company said digital sales accounted for 44% of net sales, while about a quarter of Macy’s digital sales were made in its stores during the quarter.
Macy’s said it expects its annual online sales to eclipse $ 10 billion over the next three years, as the operator of the department store predicts that the habits of shoppers to buy more on the Internet will stay the course. -beyond the pandemic.
Macy’s is also pruning its real estate to keep what it says are its top performing stores in America’s best malls. In 2019, the company announced it would close 125 locations by 2023. Earlier this year, Macy’s announced the closure of more than 40 store locations by mid-2021, as part of its plan to three-year closure.
Turning to fiscal 2021, Macy’s is calling for sales to be in the $ 19.75 billion to $ 20.75 billion range. Analysts were claiming annual revenue of $ 20.13 billion.
He expects adjusted earnings per share to be in a range of 40 cents to 90 cents. Analysts had forecast adjusted earnings of 77 cents per share.
Read the full press release and Macy’s documents here.