By
Steve Muchoki
June 1st, 2023
Macy’s is raising its overall outlook for the rest of the year based on its performance in the first quarter.
American omnichannel retailer Macy’s Inc (NYSE: M) has released its Q1 2021 earnings report in which it recorded a comparable sales growth of 62.5% on an owned basis when compared to the same period in 2020. As contained in the official press release, the company’s performance exceeded expectations on both the top and bottom lines.
On a per-share basis, Macy’s reported a net income of 32 cents. Earnings, adjusted for one-time gains and costs, came to 39 cents per share. This figure is against the expected loss of 41 cents according to analysts profiled by Zacks Investment Research. Contrary to the expected revenue of $4.46 billion, the New York-based firm reported revenue of $4.71 billion.
The impressive performance during the quarter cut across all of the company’s three brands and was boosted in part by the gradual return to life as it was pre-pandemic.
“In our first quarter, we outperformed sales expectations across all three of our brands: Macy’s, Bloomingdale’s, and Bluemercury. We built on our momentum from the fourth quarter and our sales trend continued to improve throughout the first quarter,” said Jeff Gennette, Chairman and Chief Executive Officer of Macy’s Inc. “These results were driven by the positive effects of the government stimulus program and expanding vaccine rollout, coupled with the accelerated execution of our Polaris strategy, including investments in our digital platforms.”
Gennette also highlighted customers have continued shopping items that have been in high demand throughout the pandemic including fragrance, fine jewelry, and watches amongst others.
The shares of Macy’s toppled following the earnings release, rising 4.12% to $19.95 in today’s pre-market. M stock is 0.26% down at the moment.
Other Macy’s Q1 Earnings Report Highlights
The growth recorded in the quarter was driven by both existing customers and the influx of new ones. The company brought 4.6 million new customers into Macy’s brands, a 23% increase compared to the first quarter of 2019. Of this figure, as much as 47% of new customers came through the digital channel in the first quarter of 2021.
Digital sales rose 34% when compared to the year-ago period and they grew 32% over the first quarter of 2019. The company also impressed in its Gross margin performance, recording a growth of 38.6%, up from 17.1% in first-quarter 2020 and up 40 basis points from the first quarter of 2019.
Net credit card revenue came in at $159 million, up from $28 million from the first quarter of 2020 and down $13 million from the first quarter of 2019. Based on its performance at the end of the first quarter of 2021, Macy’s retained approximately $1.8 billion in cash.
Macy’s Revised Its 2021 Fiscal Outlook
The company is raising its overall outlook for the rest of the year based on its performance in the first quarter.
“Our achievements in the first quarter, combined with the faster than anticipated economic recovery, give us the confidence to update our full-year 2021 guidance,” said Adrian Mitchell, Chief Financial Officer of Macy’s Inc.
Against the prior guidance of $0.40 to $0.90 for its adjusted diluted earnings per share, the company is now projecting $1.71 to $2.12. The new net sales outlook comes in at $21.73 billion to $22.23 billion, up from $19.75 billion to $20.75 billion.
