A person walks past a Macys store in Hyatsville, Maryland, on February 22, 2022.
Stephanie Reynolds | Agence France-Presse | Getty Images
Macy’s on Thursday reported fiscal first-quarter earnings and sales ahead of analysts’ expectations, as shoppers returned to malls to buy new clothes, luggage and luxury goods despite decades of high inflation that threatened to cut consumption.
The department store chain, which owns Bloomingdale’s, reaffirmed its fiscal year 2022 sales forecast and raised earnings guidance, forecasting stronger credit card revenue for the remainder of the year.
He joins Nordstrom in defying the broader trend in the retail industry of pessimistic forecasts and warnings of consumer backsliding on discretionary spending. In recent days, companies such as Walmart, Target, Kohl’s and Abercrombie & Fitch have warned that high expenditures on logistics and labor will continue to eat up their profits in the near term.
Macy’s shares rose more than 14% in premarket trading on the news.
The retailer still expects 2022 revenue to be flat at 1% compared to 2021 levels, which will be between $24.46 billion and $24.7 billion.
It now expects earnings, on an adjusted basis, between $4.53 and $4.95 per share, up from the previous range of $4.13 to $4.52.
“While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” CEO Jeff Jennett said in a press release. He added that the company has seen a shift among consumers to stores and towards clothing for special occasions such as women’s dresses and men’s items.
Here’s what Macy’s did in the first quarter of the fiscal year compared to what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.08 adjusted against. Expect 82 cents
- Revenues: $5.35 billion vs. $5.33 billion expected
For the three months ended April 30, Macy’s reported net income of $286 million, or 98 cents per share, compared with net income of $103 million, or 32 cents per share, a year earlier.
Excluding one-time items, it earned $1.08 per share, beating analysts’ expectations for adjusted earnings per share of 82 cents.
Revenue grew to $5.35 billion from $4.71 billion in the same period last year, also beating analyst expectations.
Digital sales were up 2%, representing 33% of net sales for the quarter. The retailer said it had 44.4 million active customers, up 14% from the previous year, with the help of Macy’s loyalty program that helped attract more people online and in stores.
Same-store sales for both owned and licensed stores grew 12.4% over the previous year. Analysts polled by Refinitiv were looking for a 13.3% increase.
Macy’s inventory levels are reported as of April 30 that are up 17% from the previous year and down 10% compared to 2019 levels.
Macy’s said those levels have ballooned somewhat as shoppers have moved away from buying active and casual clothing, as well as household goods. Supply chain restrictions also eased during the quarter, the report said, resulting in inventory receipts higher than the retailer had expected.
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