Macy’s (M) result for the third quarter of 2021 beat

The entrances to Macy’s are decorated with Christmas decorations on December 4, 2020 in New York City.

Roy Rochlin | Getty Images Entertainment | Getty pictures

On Thursday, Macy’s reported earnings and sales for the third quarter that topped analysts’ expectations, which led to the department store chain raising its full-year forecast ahead of the holiday.

Macy̵[ads1]7;s shares jumped more than 10% in pre-market trading on the news.

CEO Jeff Gennette said Macy’s added 4.4 million new customers in the quarter and benefited from an “improved financial environment.”

Separately, the company teased the launch of a new digital marketplace to be launched in the second half of 2022. The announcement comes as activist Jana Partners has taken a stake in the business and is pushing Macy’s to spin its e-commerce business from its stores, hoping to achieve a higher value than Macy’s has today.

Saks Fifth Avenue pursued a similar split earlier this year. Its e-commerce unit is now preparing for a listed offer at a higher value than it saw after the recovery from Saks’ stores.

Macy’s has not yet commented on Jana’s proposal.

Here’s how Macy’s did in the three – month period ending October 30, compared to what analysts expected, based on a survey by Refinitiv:

  • Earnings per share: $ 1.23 adjusted vs. 31 cents expected
  • Revenue: $ 5.4 billion against the expected $ 5.2 billion

Macy’s reported net income of $ 239 million, or 76 cents per share, compared to a loss of $ 91 million, or 29 cents per share, a year earlier. Excluding non-recurring items, the company earned $ 1.23 per share, better than the 31 cents analysts had predicted.

Sales grew to $ 5.4 billion from $ 3.99 billion the year before. It came in ahead of estimates of 5.2 billion dollars.

Macy’s reported comparable sales growth, on an owned plus licensed basis, of 35.6% in the quarter. Analysts had looked for a growth of 29.3%, according to Refinitiv estimates.

Digital sales grew by 19% from year to year and were up 49% on a two-year basis. The company said that their online business accounted for 33% of total sales, up 10% from the 2019 levels.

At Bloomingdale’s, comparable sales of and owned plus licensed increased 38.5% year over year. The company said buyers with more money to spend bought up luxury handbags, fine jewelry, men’s shoes and clothing.

Macy’s now sees 2021 revenues ranging from $ 24.12 billion to $ 24.28 billion, compared to a previous range of $ 23.55 billion to $ 23.95 billion.

It expects full-year adjusted earnings per share to reach $ 4.57 to $ 4.76, up from an earlier forecast of $ 3.41 to $ 3.75.

Analysts were looking for an adjusted earnings per share of 3.89 dollars on a turnover of 23.78 billion dollars.

The warehouse operator Kohl’s also raised its outlook for the year on Thursday, sending shares up almost 8% in pre-market trading.

Macy’s digital and customer manager Matt Baer said that the new digital marketplace the company is launching will help Macy’s expand its product range at a lower cost. It will allow third-party retailers to sell their wares on the Macy’s and Bloomindales websites. Macy’s said it has partnered with technology provider Mirakl to operate the platform.

Macy’s has targeted $ 10 billion in online revenue by 2023, but this marketplace should add more incremental sales on top of that, Baer said.

Bed Bath & Beyond announced that they plan to debut a similar third-party marketplace to sell items on the site. There is pressure to emulate the marketplaces that companies such as Amazon, Walmart and Target already have. But it is unclear whether these dealers will be as successful.

Jana’s interested in Macy’s shares has given the shares a boost. The shares have risen more than 174% so far this year. The retailer has a market value of $ 9.55 billion.

Find the full press release from Macy’s here.

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