Macy’s Q1 sales up across all divisions; raises outlook

Macy’s reported strong first-quarter sales across its three brands, buoyed by increased traffic to its stores as customers returned to buy new outfits, make-up and luggage.

“Our company delivered solid results in the first quarter despite a challenging operating environment,” said Jeff Gennette, chairman and CEO. “We delivered strong earnings, beating our estimates, and sales that were in line with our expectations. While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop. We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods.”

Macy’s reported its results on the heels of Nordstrom, which also had a strong quarter and cited similar trends in store traffic and dressing up.  

Macy’s net income increased to $286 million, or $0.98 a share, in the quarter ended April 30, from $103 million, or $0.32 a share in the year-ago quarter. Adjusted earnings came in at $1.08 a share. Analysts had expected adjusted earnings of $0.82 a share.

Revenue increased nearly 14% to $5.35 billion from $4.71 billion. Comparable sales up 12.8% on an owned basis and up 12.4% on an owned-plus-licensed basis.

Digital sales increased 2% year-over-year while increasing 34% versus the first quarter of 2019. Digital sales accounted for 33% of net sales, down 4% from the year-ago period but up 9% over the first quarter of 2019.

By division, Macy’s comparable sales were up 10.7% on an owned basis and up 10.1%, on an owned-plus-licensed basis. Consumer shopping behaviors shifted during the quarter to more occasion-based apparel. As a result, dresses, women’s shoes, accessories and men’s tailored had strong sales performance.

Approximately 44.4 million active customers shopped the Macy’s brand, on a trailing twelve-month basis, which was a 14% increase compared to the prior year.

In March, the retailer said that it planned to expand its off-price concept, Macy’s Backstage, opening an additional 37 in-store Backstage locations in Macy’s stores by June. Earlier this month, it brought the concept to its Herald Square flagship in Manhattan, opening a 15,000-sq.-ft. Backstage on the eight levels of the iconic stores.

Bloomingdale’s comparable sales on an owned basis were up 28.1% and on an owned-plus-licensed basis were up 26.9%. The company said it continued to see strong performance from luxury throughout the first quarter, with results-driven by strong sales of dresses, men's tailored, men's and women's contemporary apparel and luggage.

Bluemercury comparable sales were up 25.2% on an owned and owned-plus-licensed basis. Results were driven by the increase in store traffic, better-than-expected growth in its private brands and the increase in demand for color in lip, face and eye categories.

Macy's raised its adjusted 2022 earnings to $4.53 to $4.95 a share, up from its earlier view of $4.13 to $4.52 a share. The company said the raised guidance was due to first quarter 2022 share repurchases as well as improved expectations for credit card revenue. It still expects 2022 revenue to be flat to up 1% compared with 2021 levels, which would be a range of $24.46 billion to $24.7 billion.

“The actions we took in the quarter to boost our liquidity and increase our financial flexibility provides us a long runway to invest further in our transformation, navigate the unprecedented macroeconomic environment and return capital to shareholders,” said Macy’s CFO Adrian Mitchell. “As we move into the rest of this year, we have confidence in our ability to flex and pivot quickly in this dynamic environment.”

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