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A view of Macy’s flagship store
Drew Angerer / Getty Images
Macy’s
shares soared on Thursday after the department store operator crushed expectations about July quarter earnings, raised its full-year outlook and restored its dividend.
Macy’s (ticker: M) reported an adjusted profit of $ 1.29 per share during the second fiscal quarter, well ahead of expectations of 23 cents per share, according to FactSet. Sales of $ 5.655 billion, up 59% year-over-year, also exceeded estimates of $ 5.01 million. Sales at the same store jumped 61.2%, ending 41.2% growth forecasts.
“Macroeconomic trends are shifting towards more normal patterns, and M’s sales reflect this change, as denim clothing, luggage and occasions show quite renewed,” writes Elizabeth Vermillion, CFRA analyst.
Macy’s shares closed 19.6% at $ 21.61 on Thursday, their highest close since July 31, 2019, even as
S&P 500
increased by 0.1% and the
Dow Jones industrial average
decreased by 0.2%. Shares had risen 60% in 2021 and 188% in the last 12 months.
The company reinstated its quarterly dividend at 15 cents per share, payable Oct. 1 to shareholders at the close on Sept. 15, and the board also authorized a $ 500 million share repurchase program.
“Second-quarter results were strong on all three nameplates and exceeded our expectations,” CEO Jeff Gennette said in the earnings statement. “Our momentum in the first quarter accelerated in the second quarter as we re-captured core customers and attracted new and young customers with new brands and categories.”
Jefferies analyst Stephanie Wissink noted that the brand added 5 million new customers, 30% more than in the second quarter of 2019. About 41% of these came from digital channels.
Macy’s now expects full-year sales of between $ 23.55 million and $ 23.95 million, up from a previous range of more than $ 22.23 million. Its adjusted earnings per share outlook is now between $ 3.41 and $ 3.75, compared to its previous range, which topped $ 2.12.
Separately, the company said it was partnering with WHP Global to open a Toys “R” Us store-in-store concept at more than 400 Macy’s stores. A landing page for the iconic toy store brand was also launched on Macy’s website.
Corrections and amplifications: Elizabeth Vermillion covers Macy’s for CFRA. The analyst’s original note provided a De Barron he attributed it inaccurately to Camilla Ianushevsky.
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