Retailer Macy's (M) beat Wall Street expectations for comparable sales in the fourth quarter of 2021, benefiting from a strategy to overcome supply chain issues by stocking up on products in advance.
The company’s Q4 net income grew to $742 million U.S., or $2.44 U.S. a share, from $160 million U.S., or 50 cents U.S. per share, a year earlier. Excluding one-time items, the retailer earned $2.45 U.S. a share, better than the $2 U.S. that analysts had expected.
Revenue grew to $8.67 billion U.S. from $6.78 billion U.S. a year earlier, beating Wall Street expectations for $8.47 billion U.S.
Macy’s same-store sales surged 28.3% in the fourth quarter, topping analysts' average estimate of a 24.8% increase, according to Refinitiv data.
After a strong start to the holiday season in November, retailers grappled with a double whammy of an early start to holiday shopping and the emergence of the Omicron variant of COVID-19, which sent U.S. retail sales tumbling by the most in 10 months in December.
However, Macy's efforts to speed up shipments and order products earlier in the year to stock up for the holidays, the most important time of the year for retailers, helped the company counter the hit from a decline in December shopping.
Separately, Macy’s said it decided against a push by activist investor Jana Partners to separate its digital business. The company said its digital sales rose 12% year-over-year and increased 36% on a two-year basis in the fourth quarter. E-commerce represents nearly 40% of Macy’s net sales.
Macy’s stock rose nearly 9% in premarket trading on news of its latest financial results. The company’s share price has gained 14% in the past six months to trade at just over $25 U.S.
