Macy's Q4 earnings beat analysts' expectations

Diluted earnings per share were 1.83 dollars and adjusted diluted earnings per share 1.88 dollars for the fourth quarter compared to 2.44 dollars and 2.45 dollars in the same quarter of 2021, respectively. According to Refinitiv, the company's adjusted earnings per share of 1.71 dollars excluding a tax benefit, were higher than the analysts' expectation of 1.57 dollars.

Net sales for the quarter of 8.3 billion dollars, were down 4.6 percent and down 0.9 percent versus the fourth quarter of 2019. Digital sales decreased 9 percent versus the fourth quarter of 2021 and rose 24 percent versus the fourth quarter of 2019.

“We successfully navigated 2022 from a position of financial and operational strength. Despite an increasingly volatile macroeconomic climate, through the ongoing execution of our Polaris strategy, we remained agile, pivoted to meet customer demand and elevated our approach to inventory management,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc.

Highlights of Macy’s Q4 performance

The company’s brick-and-mortar sales decreased 2 percent and were down 11 percent versus the fourth quarter of 2019. The comparison to 2019 is impacted by store closures, including approximately 80 Macy’s full-line stores.

The company said, comparable sales were down 3.3 percent on an owned basis and down 2.7 percent on an owned-plus-licensed basis and increased 3.1 percent and 3.3 percent, respectively, versus the fourth quarter of 2019.

Macy’s brand comparable sales were down 3.9 percent on an owned basis and down 3.3 percent, on an owned-plus-licensed basis.

Bloomingdale’s comparable sales were up 1.2 percent on an owned basis and up 0.6 percent on an owned-plus-licensed basis. The company added that beauty, women’s and men’s apparel in both contemporary and dressy performed well partially offset by weakness in handbags and textiles.

Bluemercury comparable sales were up 7.2 percent on an owned basis driven by strength in skincare and colour, strategic partnerships and its new initiative The Cache, an incubator platform that curates the latest undiscovered, emerging, and cutting-edge brands.

Gross margin for the quarter was 34.1 percent, down from 36.5 percent in the fourth quarter of 2021.

Review of Macy’s full-year results and outlook

For the full year, diluted earnings per share were 4.19 dollars and adjusted diluted earnings per share were 4.48 dollars compared to 4.55 dollars and 5.31 dollars in 2021. This compares to diluted earnings per share of 1.81 dollars and adjusted diluted earnings per share of 2.91 dollars in 2019.

Net sales of 24.4 billion dollars, were down 0.1 percent versus 2021 and down 0.5 percent versus 2019. Digital sales decreased 6 percent versus 2021; up 31 percent versus 2019. Brick-and-mortar sales increased 3 percent versus 2021; down 11 percent versus 2019. Comparable sales were up 0.3 percent on an owned basis and up 0.6 percent on an owned-plus-licensed basis versus 2021; up 3.5 percent and up 3.7 percent, respectively, versus 2019.

Gross margin for the year was 37.4 percent, down from 38.9 percent in 2021.

For fiscal 2023, the company expects net sales to range between 23.7 billion dollars to 24.2 billion dollars, down between 3 percent to 1 percent, comparable owned plus licensed sales to be down between 4 percent to down 2 percent and adjusted diluted earnings per share in the range of 3.67 dollars to 4.11 dollars.