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Macy’s (M) reports earnings for the first quarter of 2022 exceeded, increases forecasts

Macy’s on Thursday reported first-quarter tax gains and sales above analysts’ expectations as shoppers returned to the malls to shop for new clothes, luggage and luxury items, despite decades of high inflation threatening to curb consumption.

The department store chain, which also owns Bloomingdale’s, has confirmed sales prospects for fiscal 2022 and boosted its earnings guidance, expecting stronger credit card revenue for the rest of the year.

It is partnering with Nordstrom to reverse a broader trend in the retail industry with negative forecasts and warnings of consumers leaving discreet spending. In recent days, companies such as Walmart, Target, Kohl’s and Abercrombie & Fitch have warned that higher logistics and labor costs will continue to affect their profits in the near future.

Shares of Macy rose about 13% in preliminary news trading.

The retailer still expects revenue in 2022 to be stable at 1% compared to 2021 levels, which will range from $ 24.46 billion to $ 24.7 billion.

It now forecasts earnings, on a custom basis, between $ 4.53 and $ 4.95 per share, from a previous range of $ 4.13 to $ 4.52.

“As macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” CEO Jeff Gennette told a news release. He added that the company saw a shift among consumers back to stores and clothing for special occasions such as women’s dresses and menswear cuts.

See how Macy’s did in the first quarter compared to what Wall Street expected, according to a survey by Refinitiv analysts:

  • Earnings per share: $ 1.08 customized against 82 cents expected
  • Income: $ 5.35 billion versus $ 5.33 billion expected

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

Excluding one-off data, it earned $ 1.08 per share, exceeding analysts’ expectations for adjusted earnings per share of 82 cents.

Revenue rose nearly 14 percent to $ 5.35 billion from $ 4.71 billion a year earlier, beating analysts’ forecasts.

Digital sales increased by 2%, accounting for 33% of net sales for the quarter. The retailer said it had 44.4 million active customers, up 14% from a year earlier, with the help of Macy’s loyalty program, which has helped attract more people online and in-store.

Sales of own stores for both privately owned and licensed stores increased by 12.4% compared to the previous year. Analysts polled by Refinitiv were looking for a 13.3% increase.

Gennette told analysts at a post-earnings conference that high-income consumers have so far been less affected by inflation, boosting sales of more expensive goods at Macy’s Bloomingdale’s business.

Consumers earning less than $ 75,000 a year were more likely to frequent Macy’s off-price businesses in the background and seemed more affected by rising prices, but still spent more money, Gennette said.

“We operate in the full range of value, from off-price to luxury,” the CEO said in the call. “This, combined with the wide range of categories, products and brands, enables us to adapt to consumer demand.”

The company also saw international tourism grow quarterly, according to Gennette, driving traffic to Macy’s department stores in major cities, including New York. There has been a remarkable rise in tourism from Central and South America, as well as Europe, he said.

Macy’s stock levels were reported on April 30, which increased by 17% compared to the previous year and decreased by 10% compared to 2019 levels.

Macy’s said those levels were somewhat inflated as shoppers moved away from buying active and casual clothing as well as household items. Supply chain restrictions also eased during the quarter, he said, resulting in higher-than-expected inventories.

However, Gennette said there was still considerable uncertainty about the retailer’s supply chain amid ongoing pandemic lockdowns in China and ongoing labor negotiations in the port of Los Angeles.

“Factors like these lead us to continue to follow a prudent and disciplined approach to our delivery times and forecasts,” he said.

Macy’s (M) reports earnings for the first quarter of 2022 exceeded, increases forecasts

Source link Macy’s (M) reports earnings for the first quarter of 2022 exceeded, increases forecasts

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