Macy’s Q4 earnings beat estimates, reveals positive outlook

Macy’s, Inc. diluted earnings per share were 2.44 dollars and adjusted diluted earnings per share were 2.45 dollars in the fourth quarter over 2 dollars that analysts were expecting. Revenue grew to 8.67 billion dollars from 6.78 billion dollars a year earlier, beating expectations for 8.47 billion dollars.

This compared to diluted earnings per share of 50 cents and adjusted diluted earnings per share of 80 cents in the fourth quarter of 2020 and diluted earnings per share of 1.09 dollars and adjusted diluted earnings per share of 2.12 dollars in the fourth quarter of 2019.

The company’s comparable sales were up 28.3 percent on an owned basis and up 27.8 percent on an owned-plus-licensed basis versus the fourth quarter of 2020; up 6.6 percent and up 6.1 percent, respectively, versus the fourth quarter of 2019. Digital sales increased 12 percent versus 2020 and 36 percent versus 2019.

“Our results in the fourth quarter delivered a strong end to a solid year. I am proud that Macy’s, Inc. outperformed expectations on both the top and bottom lines every quarter in 2021, despite Covid-19 related disruptions, supply chain issues, labour shortages and elevated inflation,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc.

Result highlights of Macy's Inc brands performance

Macy’s brand comparable sales were up 27.3 percent on an owned basis and up 26.5 percent on an owned-plus-licensed basis versus the fourth quarter of 2020, and up 5.9 percent and 5.2 percent, respectively, versus the fourth quarter of 2019.

Bloomingdale’s comparable sales on an owned basis were up 37.8 percent and on an owned-plus-licensed basis were up 37.6 percent versus the fourth quarter of 2020, and up 13 percent versus the fourth quarter of 2019.

Bluemercury comparable sales were up 30.9 percent on an owned and owned-plus-licensed basis versus the fourth quarter of 2020, and up 3.1 percent on an owned and owned-plus-licensed basis versus the fourth quarter of 2019.

Gross margin for the quarter was 36.5 percent, up from 33.7 percent in the fourth quarter of 2020 and down 30 basis points from the fourth quarter of 2019.

Macy’s returns to earnings growth in full-year 2021

The company said, diluted earnings per share of 4.55 dollars and adjusted diluted earnings per share of 5.31 dollars both exceeded expectations for the year.

This compares to a diluted loss per share of 12.68 dollars and an adjusted diluted loss per share of 2.21 dollars in 2020 and diluted earnings per share of 1.81 dollars and adjusted diluted earnings per share of 2.91 dollars in 2019. Comparable sales were up 43 percent on an owned basis and up 42.9 percent on an owned-plus-licensed basis versus 2020; up 3.1 percent and up 3 percent, respectively, versus 2019.

Macy’s brand active customer count increased 18 percent over 2020 and 1 percent over 2019 to 44 million. Digital sales increased 13 percent versus 2020 and increased 39 percent versus 2019. Digital penetration was 35 percent of net sales, a 9-percentage point decline from 2020, but a 10-percentage point improvement over 2019.

Gross margin for the year was 38.9 percent, up from 29.2 percent in 2020 and up 70 basis points from 2019.

Macy’s reveals outlook for fiscal year 2022

Macy’s, Inc. anticipates positive momentum in 2022 supported by the Polaris initiatives and strong consumer demand. At the same time, the company expects macro environment challenges such as inflation, supply chain pressures, labour shortages and potential Covid-19 variants.

The company expects to report fiscal 2022 sales of 24,460 million dollars to 24,700 million dollars, flat to up 1 percent versus 2021. Comparable owned plus licensed sales three-year CAGR to be up between 1.1 percent to 1.4 percent. Adjusted EBITDA as a percent of sales to be between 11 percent to 11.5 percent and adjusted diluted earnings per share to range between 4.13 to 4.52 dollars.