Business

Beat Macy’s (M) Q3 2021 Revenue

The entrances to Macy’s will be decorated for Christmas on December 4th, 2020 in New York City.

Roy Rochlin | Getty Images Entertainment | Getty Images

Macy’s reported third quarter results and sales on Thursday that exceeded analyst expectations, prompting the department store chain to raise its full-year forecast ahead of the holidays.

Macy’s shares rose more than 10% in pre-trading on the news.

CEO Jeff Gennette said Macy’s added 4.4 million new customers in the quarter and benefited from an “improved economic environment.”

Regardless, the company has touted the launch of a new digital marketplace that will be launched in the second half of 2022. The announcement comes as activist Jana Partners got involved in the company and pressures Macy’s to outsource its e-commerce operations from its stores in hopes of gaining a higher valuation than what Macy’s has today.

Saks Fifth Avenue pursued a similar split earlier this year. The e-commerce unit is now reportedly preparing to go public at a higher valuation than it did after it was spun off from the Saks stores.

Macy’s has not yet commented on Jana’s proposal.

In the three-month period ending October 30, Macy’s has performed compared to analyst expectations based on a survey by Refinitiv:

  • Earnings per share: USD 1.23 adjusted vs. 31 cents expected
  • Revenue: $ 5.4 billion versus $ 5.2 billion expected

Macy’s posted net income of $ 239 million, or 76 cents per share, compared to a loss of $ 91 million, or 29 cents per share, the previous year. Excluding one-time effects, the company made $ 1.23 per share, better than the 31 cents predicted by analysts.

Revenue rose to $ 5.4 billion from $ 3.99 billion a year ago. That was above the estimate of $ 5.2 billion.

Macy’s posted comparable proprietary and licensed revenue growth of 35.6% for the quarter. According to Refinitiv estimates, analysts had expected growth of 29.3%.

Digital revenue grew 19% year-over-year and 49% on a two-year basis. The company said its online business accounted for 33% of total sales, 10% more than in 2019.

At Bloomingdale’s, like-for-like sales on and owned plus licenses grew 38.5% year over year. The company said shoppers with more money to spend were buying luxury handbags, fine jewelry, men’s shoes, and clothing.

Macy’s sees revenue between $ 24.12 billion and $ 24.28 billion in 2021, compared to a previous range of $ 23.55 billion to $ 23.95 billion.

For the full year, adjusted earnings per share are expected to be in the range of $ 4.57 to $ 4.76, up from an earlier guidance of $ 3.41 to $ 3.75.

Analysts were looking for adjusted earnings per share of $ 3.89 on sales of $ 23.78 billion.

The department store operator Kohl’s also raised its annual outlook on Thursday and increased its share by almost 8% in pre-market trading.

Matt Baer, ​​Macy’s chief digital and customer officer, said the new digital marketplace the company is launching will help Macy’s expand its product range at a lower cost. It will allow third-party sellers to sell their goods on the Macy’s and Bloomindales websites. Macy’s has partnered with technology provider Mirakl to operate the platform.

Macy’s is targeting $ 10 billion online sales by 2023, but this marketplace should add more additional sales on top of that, Baer said.

Bed Bath & Beyond announced earlier this month that it would be launching a similar third party marketplace to sell items on its website. It’s a push to mimic the marketplaces that companies like Amazon, Walmart, and Target already have. However, it is unclear whether these retailers will be as successful.

Jana’s interest in Macy’s stock has given the retailer’s stocks a boost. The stock has rallied more than 174% since the start of the year. Macy’s has a market value of $ 9.55 billion.

The full Macy’s press release can be found here.

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