People line up to enter Macy’s department store during Black Friday in New York City on November 25, 2022.
Yuki Iwamura | AFP | Getty Images
Macy’s shares jumped on Thursday as the company said it was attracting holiday shoppers looking for freebies and holding the line on promotions.
But the operator of the department store, which includes high-end banner Bloomingdale’s and beauty chain Bluemercury, said he still foresees a more turbulent year.
Macy’s said it expects net sales to decline in the 1% to 3% range in the fiscal year from 2022, which would translate to between $23.7 billion and $24.2 billion. . He said he expects his adjusted diluted earnings per share to be between $3.67 and $4.11.
During the holiday quarter, CEO Jeff Gennette said the company was “competitive but measured in our promotions, took strategic markdowns, and intentionally did not pursue unprofitable sales.”
He said Macy’s is focused on refreshing its private labels, opening more out-of-mall stores and growing its luxury business and online market.
Here’s how Macy’s fared for its three-month period that ended Jan. 28 compared to what analysts expected, based on Refinitiv estimates:
- Earnings per share: $1.71 vs. $1.57 expected
- Revenue: $8.26 expected vs. $8.26 billion expected
Fourth-quarter net income fell to $508 million, or $1.83 per share, from $742 million, or $2.44 per share, a year earlier. The company reported adjusted earnings per share of $1.88. Excluding a tax benefit during the quarter, adjusted earnings per share were $1.71.
Comparable sales on an owned plus license basis decreased 2.7% in the period from a year ago, but increased 3.3% from the fourth quarter of 2019.
The company reported adjusted earnings per share of $1.88. Excluding the tax benefit, it generated adjusted earnings per share of $1.71, higher than the $1.57 expected by analysts, according to Refinitiv.
Macy’s results signal that sales patterns have picked up in the final weeks of the quarter. By early January, the company had shared the first holiday numbers. At the time, he said he expected his holiday sales to be lighter than expected. The company said it noticed customers were watching their spending more carefully and buying fewer items for themselves when shopping for gifts in November and December.
During an interview with CNBC in January, Gennette said Macy’s closely monitors data for its own credit cards and those co-branded with American Express. He said consumers were accumulating larger balances and carrying more of those balances from month to month rather than paying them all off – a potential sign of financial strain.
“When we look at our credit portfolio, you have a customer who is under more pressure,” he said at the time.
As of Wednesday’s close, Macy’s shares are down about 1% so far this year. Its stock trails the S&P 500, which rose about 3% over the same period. Shares of the company closed at $20.43 on Wednesday, bringing Macy’s market capitalization to about $5.5 billion.
Read Macy’s full earnings release.
This story is developing. Please check for updates.