Macy's reports stronger net sales than pre-Covid period
Macy's Inc.
$18.43
10:59 26/04/24
American department store giant Macy's said in its 2022 results on Thursday that amid a challenging macroeconomic environment, its diluted earnings per share came in at $4.19 and an adjusted diluted earnings per share were $4.48, down from the prior year's $4.55 and $5.31, respectively.
The company's net sales for the year totalled $24.4bn, down 0.1% from the previous year but up 0.5% compared to the pre-pandemic comparator in 2019.
Digital sales decreased 6% from 2021 but increased by 31% from 2019, while brick-and-mortar sales increased 3% from 2021, but decreased 11% from 2019.
Customer count for the Macy's brand was down 4% year-on-year, while the Bloomingdale's nameplate saw a 5% increase in active customers.
The Bluemercury brand, meanwhile, saw a 12% increase in active customers compared to the previous year.
Macy’s said its gross margin for the year was 37.4%, down from 38.9% in 2021.
The board said its merchandise margin declined due to planned markdowns and promotions, which were higher year-on-year as a result of a shift of consumer demand from pandemic-related categories to occasion-based categories.
“We successfully navigated 2022 from a position of financial and operational strength,” said chairman and chief executive officer Jeff Gennette.
“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.
“In the fourth quarter, we benefited from our disciplined inventory approach and compelling gift-giving strategy, which allowed us to provide fresh fashion and style at great values for all our customers.”
Gennette said Macy’s was “competitive but measured” in its promotions, took strategic markdowns and intentionally did not chase unprofitable sales.
“As we look to 2023 and beyond, we believe our five growth vectors which include our private brands reimagination, off-mall expansion, online marketplace, luxury brands acceleration and personalised offers and communication will further solidify our modern department store positioning.”
Looking ahead, Macy’s said its 2023 outlook reflected the potential differences in the severity and duration of macroeconomic headwinds, offset by how the business would be able to respond.
It said it was expecting net sales in 2023 of $23.7bn to $24.2bn, down 1% to 3% on 2022, while adjusted diluted earnings per share were pencilled in at between $3.67 to $4.11.
The company said it anticipated that the heightened level of uncertainty within the macroeconomic environment would continue in 2023.
“We have built a solid foundation for long-term, profitable growth through enterprise-wide investments in our supply chain, data and analytics, pricing science, digital and technology which have enabled our operations and talented teams to become more efficient and flexible,” said chief financial officer Adrian Mitchell.
“Looking ahead, we will continue to take a balanced approach to expense management and capital allocation.
“With an ongoing focus on maintaining our financial health and strong balance sheet, we will make disciplined investments to drive growth while returning capital to shareholders.”
Reporting by Josh White for Sharecast.com.