Macy’s stock rises as company approaches 2022 profit despite uncertain retail landscape

Messi’s Fiscal first-quarter profits and sales on Thursday reported ahead of analysts’ expectations, as shoppers returned to malls to shop for new outfits, accessories and luxury goods despite decades of high inflation, which has dented consumption.

The department store chain, which also owns Bloomingdale’s, reaffirmed its fiscal 2022 sales outlook and raised its profit guidance, anticipating strong credit card revenue for the rest of the year.

it connects nordstrom In mitigating the broader trend of declining retail industry forecasts and warnings of consumer pullbacks on discretionary spending. In recent times, companies including walmart, target, kohlso And Abercrombie & Fitch has cautioned that higher expenditure on logistics and labor will continue to impact their profits in the near future.

Macy’s shares closed up 19% at $22.92 on Thursday.

The retailer still expects 2022 revenue to be flat 1% compared to 2021 levels, in a range of $24.46 billion to $24.7 billion.

It now projects earnings between $4.53 and $4.95 per share, up from the prior range of $4.13 to $4.52 per share, on an adjusted basis.

“While macroeconomic pressure on consumer spending increased during the quarter, our customers continued to shop,” Chief Executive Officer Jeff Gennett said in a press release. He added that the company saw a shift among consumers towards in-store clothing and clothing for special occasions such as women’s clothing and tailored men’s accessories.

Here’s How Macy’s Did It in its fiscal first quarter Compared to what Wall Street was anticipating based on a survey of analysts by Refinitiv:

• earnings per share: $1.08 adjusted vs 82 cents expected
• revenue: $5.35 billion versus $5.33 billion expected

For the three-month period ended April 30, Macy’s net income was $286 million, or 98 cents per share, compared to net income of $103 million, or 32 cents per share, a year ago.

Excluding one-time items, it earned $1.08 per share, topping analysts’ expectations for adjusted earnings per share of 82 cents.

Revenue rose nearly 14% to $5.35 billion, up from $4.71 billion in the year-ago period, which also topped analysts’ forecasts.

Digital sales climbed 2%, representing 33% of net sales for the quarter. The retailer said it has 44.4 million active customers, up 14% from last year, aided by Macy’s loyalty program, which helped attract more people online and into stores.

Same-store sales for both its owned and licensed stores grew 12.4% over the prior year. Analysts surveyed by Refinitiv were looking for 13.3 percent growth.

Janet told analysts on a post-earnings conference call that higher-income consumers have been less affected by inflation so far, driven by increased sales of more expensive goods at Macy’s at Bloomingdale’s business.

Consumers with less than $75,000 in annual income were more likely to frequent Macy’s off-price backstage business and were most affected by rising prices, but they still spent more money, Janet said. .

“We operate across the price spectrum from off-price to luxury,” the CEO said on the call. “This, along with our wide assortment of categories, products and brands, gives us the ability to flex with consumer demand.”

According to Janet, the company also saw international tourism back in the quarter, driving traffic to Macy’s department store locations in major cities, including New York. He noted that there has been a significant increase in tourism from Central and South America as well as Europe.

Macy’s reported inventory levels as of April 30 that were down 17% from the prior year and 10% lower than 2019 levels.

Macy’s said those levels were raised in part as shoppers turned away from buying active and casual wear as well as home goods. Supply chain constraints also loosened during the quarter, resulting in a higher percentage of inventory receivables than the retailer expected.

However, Janet said there is still significant uncertainty around the retailer’s supply chain amid the ongoing pandemic lockdown in China and labor talks at the port in Los Angeles.

“Such factors motivate us to continue a prudent and disciplined approach with our prime timing and forecast,” he said.