Macy’s surprises with Q1 profit, beat estimates
Macy’s outperformed expectations across all three of its brands — Macy’s, Bloomingdale’s and Bluemercury — and swung to a profit in the first quarter as shoppers returned to its stores.
The department store retailer said its results were driven by the positive effects of government stimulus checks and the expanding vaccine rollout, along with its digital investments. Macy’s noted it is seeing improvements in special occasion categories as customers start to travel “and return to a pre-pandemic lifestyle.” On the company's earnings call, executives said that men’s tailored clothing is also seeing increases.
The company reported a profit of $103 million, or $0.32 per share in the quarter ended May 1, compared with a loss of $3.6 billion, or $11.53 per share, in the year-ago period. Excluding one-time charges, Macy’s earned $0.39 per share, beating analysts’ estimates for a loss of $0.41.
Net sales grew to $4.71 billion from $3.02 billion a year earlier, topping expectations of $4.37 billion. Comparable sales rose 62.5% from the year-ago period as stores temporarily closed due to the pandemic and shoppers focused on essentials.
Digital sales rose 34% year over year, and were up 32% from 2019 levels. Online sales accounted for 37% of net sales, down 6% from the year-ago period when stores were closed amid the pandemic, but up 13% from the first quarter of 2019.
Macy’s said it added 4.6 million customers during the quarter, a 23% increase from the same period in 2019. It said 47% of those new shoppers made online purchases.
“As consumers seek to re-engage with each other, we are seeing promising signs that our core customers are shopping again, and we continue to attract new customers, who increasingly begin their shopping experience with us online,” said Jeff Gennette, chairman and CEO. “Customers are shopping categories that have been strong throughout the pandemic, including home, fine jewelry and watches, fragrance and luxury items.”
The retailer is also seeing improvement in special occasion categories as customers begin to travel and return to a pre-pandemic lifestyle.
“We also have emerging opportunities in new categories and brands, including toys, health & wellness, pet and home décor,” Gennette said.
On the heels of its strong first quarter, the retailer raised its full year 2021 guidance.
“Our achievements in the first quarter, combined with the faster than anticipated economic recovery, give us the confidence to update our full-year 2021 guidance,” said Adrian Mitchell, CFO. “The momentum and strength of our digital business is reshaping how we engage with customers as an omnichannel retailer.”
Macy’s now expects net sales in fiscal 2021 to range from $21.73 billion to $22.23 billion, up from its previous estimate of $19.75 billion to $20.75 billion. The company estimates earnings of $1.71 to $2.12 per share, after adjustments, up from its previous range of $0.40 to $0.90 per share.