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Monday, November 28, 2022

Macy’s Q4 results tops analysts’ estimates, completes review – WHIO TV 7 and WHIO Radio

NEW YORK — (AP) — Macy’s reported strong fourth-quarter sales and profits that exceeded Wall Street estimates even as the department store faced numerous challenges from supply chain issues to labor shortages and inflation.

The company, based in New York, also said that it would not spin off its ecommerce division from its physical stores, rejecting a push from an activist investor Jana to separate the businesses to create better value, similar to what Saks Fifth Avenue did early last year. The decision came after a comprehensive review, Macy’s said.

The company reported profits of $742 million, or $2.44 per share, for the three month period ended Jan. 29. That compares with $160 million, or 50 cents per share, in the year- ago period. Adjusted earnings were $2.45 per share.

Revenue was $8.66 billion, up nearly 30% from $6.78 billion in the year-ago quarter.

Analysts were expecting profits of $2.01 per share on $8.46 billion in sales.

Sales at store opened at least a year — a critical measure for a retailer’s health — rose 28.3%. That excludes licensed businesses like cosmetics. Online sales were up 12% for the quarter.

Roughly 7.2 million new customers shopped the Macy’s brand during the quarter, an 11% increase versus the fourth quarter of 2019. During the fourth quarter of 2021, 58% of new customers came through the digital channel, the company said.

Like other retailers, Macy’s faces rising costs for everything from labor to shipping as supply chain backups hit companies worldwide during the holidays. This past holiday quarter also offered an extra challenge: a contagious new variant, omicron, that made some customers nervous about going into stores. It also forced many workers to take sick leave, resulting in surging costs for companies having to hire more workers beyond what was planned to fill that gap.

In November, Macy’s said that it would a pay minimum of $15 per hour for new and current workers by May.

Meanwhile, Macy’s said its decision to reject the call for a spin off of its e-commerce decision came after a lengthy comprehensive review by the board, with the assistance of independent financial, legal and third-party advisers and the company’s management team.

It said that key to the board decision-making were the high separation costs and ongoing costs from operating separated businesses, as well as high risk for the business and the company’s customers. Instead, the company is accelerating initiatives that expand such areas as online, private label and the increase off-mall, small-format Market by Macy’s and Bloomingdale’s stores.

Macy’s share surged more than 7% on the news in premarket trading.


Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio


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