Macy’s Inc., seeing the impact of government stimulus and a return to shopping by core customers, beat earnings and sales expectations for the first quarter, prompting the department store to raise its outlook for the year.
Macy’s net income in the first quarter ended May 1 came to $103 million versus a loss of $3.58 billion in the year-ago period.
Diluted earnings per share of $0.32 and adjusted diluted earnings per share of $0.39 in the latest quarter compared to $0.44 for both diluted and adjusted diluted earnings per share in first quarter 2019.
Excluding asset sale gains, adjusted diluted earnings per share for the quarter exceeded first-quarter 2019 by $0.04.
Comparable sales rose 63.9 percent from the 2020 quarter, but on an owned plus licensed basis versus 2020 were down 10 percent from the 2019 quarter.
Net sales came to $4.71 billion versus $3.02 billion in the year-ago period.
Digital sales grew 34 percent over first quarter of 2020 and 32 percent over the first quarter of 2019. Digital penetration was 37 percent of net sales, a 6 point decline from first-quarter 2020 when stores were temporarily closed, but a 13-percentage point improvement over first quarter of 2019.
“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. Macy’s remains a fashion and style source for customers as a digitally led omnichannel retailer.
“As consumers seek to re-engage with each other, we are seeing promising signs that our core customers are shopping again, and we continue to attract new customers, who increasingly begin their shopping experience with us online,” continued Gennette. “Customers are shopping categories that have been strong throughout the pandemic, including home, fine jewelry and watches, fragrance and luxury items. And we’re encouraged by the improvement we’re seeing in special occasion categories as customers begin to travel and return to a pre-pandemic lifestyle. We also have emerging opportunities in new categories and brands, including toys, health and wellness, pet and home decor.”
Gennette said the company is “well positioned to deliver sustainable, profitable growth in 2021 and the years beyond.”
The first-quarter performance prompted the company to raise its full-year 2021 guidance. Sales are now seen coming in at between $21.73 billion and $22.23 billion, versus previous guidance of $19.75 billion to $20.75 billion.
Adjusted diluted earnings per share are seen at $1.71 to $2.12, versus the previous guidance of $0.40 to $0.90.