Macy’s Notes Shift to Occasion-Based Spending

May 26, 2022 9:46 AM By Rapaport News

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RAPAPORT... Macy’s reported strong sales of luxury products and raised its profit forecast as the US retail sector weathered the challenges facing the market.

Revenue rose 14% year on year to $5.35 billion in the first fiscal quarter, which ended April 30, the department-store chain said Thursday. Comparable-store sales — at branches open for a least a year — rose 13% at Macy’s-owned shops and 12% at all locations, including those licensed to other owners. Net profit more than doubled to $286 million from $103 million a year earlier.

“While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” Macy’s chairman and CEO Jeff Gennette said in a statement. “We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods.”

The retailer maintained its full-year sales guidance of $24.46 billion to $24.7 billion, representing growth between 0% and 1%. The company tweaked its full-year profit outlook upward, reflecting a share repurchasing program that it carried out during the quarter. It predicted adjusted diluted earnings of up to $4.95 per share, compared with an earlier forecast of up to $4.52 per share.

Overall digital sales at Macy’s increased 2% for the quarter versus the same period of 2021 and jumped 34% compared with 2019, management noted. However, the segment slipped as a proportion of total sales, contributing 33%, down from 37% a year earlier.

While Macy’s made no mention of jewelry, the category has been one of the company’s strongest in recent years and excelled during the 2021 holiday season. The jewelry industry has also outperformed the retail market this year, according to monthly data reports from Mastercard SpendingPulse.

Image: Macy’s on 34th Street, New York, in 2014. (Shutterstock)

Tags: jeff gennette, Macy’s, MasterCard SpendingPulse, Rapaport News, retail, US