Macy’s (NYSE:M) on Thursday raised its earnings forecast for the year after the department store operator said it has fresh merchandise and is ready for the holiday shopping season.
The company stood by its revenue guidance as it faces a tougher sales backdrop during the retail industry’s most crucial quarter. The updated outlook came after Macy’s reported third-quarter revenue and earnings that topped Wall Street expectations.
Macy’s CEO Jeff Gennette said the company can hold the line on prices because it has fresh merchandise. That has allowed it to bring in new apparel, home goods and other gift-giving items. He said it is not seeing customers trade down to cheaper brands.
However, he said Macy’s did see a drop in sales in the final weeks of October and early November. Store and website visits remained the same — but the browsing did not lead to buying. In the past week, he said, Macy’s has seen a return to a better performance.
Earnings per share came in at 52 cents adjusted vs. 19 cents expected, on revenues of $5.23 billion vs. $5.2 billion expected
Comparable sales on an owned plus licensed basis fell 2.7% from a year ago. But Macy’s said the figure was up when compared to the the third quarter of 2019, before the pandemic.
Macy’s has seen a shift in what people are buying in the past few quarters. That pattern held in recent months, as shoppers bought dressier attire instead of the pajamas, workout clothes and home goods like bedding that they loaded up on earlier in the pandemic, Gennette said.
M shares $1.75, or 8.9%, to $21.46.
