Macy’s (M) Fourth Quarter 2022 Earnings

People line up to enter a Macy’s department store during Black Friday in New York City on November 25, 2022.

Yuki Iwamura | AFP | Getty Images

Macy’s Shares surged on Thursday as the company said it had queued up with promotions to attract holiday shoppers looking for gifts.

But department store operators, including luxury brand Bloomingdale’s and beauty chain Blue Mercury, say they plan for even more volatility in the coming year.

Macy’s said it expects net sales for the fiscal year to decline in the range of 1% to 3% compared to 2022 to $23.7 billion to $24.2 billion. The company said it expects adjusted diluted earnings per share of $3.67 to $4.11.

The company’s shares rose 10% in Thursday morning trading.

On a conference call with investors, Macy’s CEO Jeff Gennett said discretionary spending will continue to come under pressure as consumers “continue to shift toward services and essentials.” He said he expects

Over the next year, Macy’s said it will focus on increasing sales by refreshing its private label, opening more off-mall stores, and growing its luxury business and online marketplace.

Here’s how Macy’s performed in the three months ending Jan. 28, compared to what analysts had expected, based on Refinitiv’s estimates.

  • Earnings per share: $1.71 vs $1.57 expected
  • Earnings: $8.26 Expected vs $8.26 Billion Expected

Fourth-quarter net income decreased to $508 million, or $1.83 per share, from $742 million, or $2.44 per share, in the year-ago quarter. The company reported his adjusted earnings per share at $1.88. Excluding tax benefits, adjusted earnings per share were $1.71, according to Refinitiv, beating analyst expectations of $1.57. Revenues were down nearly 5% from last year’s $8.67 billion.

Owned plus license-based comparable revenue decreased 2.7% year-on-year but increased 3.3% compared to the fourth quarter of 2019.

Macy’s results show a rebound in sales patterns in the final week of the quarter. In early January, the company announced an early vacation number.At that time it was Sales will be on the lighter side of expectations. The company said it noticed that consumers were monitoring their spending more carefully and buying fewer items for themselves when shopping for gifts in November and December.

Macy’s is different from other retailers in another way. It has not been able to cope with the glut of unsold products. At the end of the fourth quarter, inventories were down about 3% year-on-year and about 18% lower than in 2019.

This meant that retailers could sell fewer items at deep discounts, even though they had to compete with retailers with large sales.

During the holiday quarter, Gennett said in a news release that the company was “competitive but cautious in its promotions, making strategic price cuts and deliberately not chasing unprofitable sales.”

Bloomingdale’s and Bluemercury are the strongest parts of the company’s business. Bloomingdale’s comparable sales increased 0.6% year over year on an owned plus license basis. Comparable sales for Bluemercury increased by 7.2% on a owned basis as shoppers sought newer, more colorful makeup alongside skincare products.

The company said it noticed “the impact of macroeconomic pressures” in the fourth quarter on Macy’s stores and on its website. was doing well. Sales of activewear, casual clothing, blankets, pillows, towels and other household items were down year-on-year.

As of Wednesday’s close, Macy’s shares are down about 1% so far this year. The company’s stock is trading below the S&P 500, which has risen about 3% over the same period. The company’s shares closed at $20.43 on Wednesday, giving Macy’s a market capitalization of about $5.5 billion.

Read full text Macy’s earnings release. Macy’s (M) Fourth Quarter 2022 Earnings

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