Macy’s Back in Black Last Quarter

Macy’s (NYSE:M) on Tuesday reported its first quarterly profit in a year, as its efforts to slash inventories during the holidays and rely less on deep discounting paid off.

The company said it expects 2021 to be a year for recovery and rebuilding, as it claws its way back from the losses it has suffered during the pandemic. It offered an outlook that anticipates continued pandemic-related obstacles during the spring, with momentum escalating in the back half of 2021.

Like many of retailers, Macy’s has been hurt as shoppers working from home and attending fewer social events make fewer trips to the mall during the health crisis and purchase less clothing.

Sales fell to $6.78 billion from $8.34 billion a year earlier, better than the $6.5 billion that analysts were expecting.

Macy’s said same-store sales on an owned plus licensed basis fell 17.1% from 2019 levels. Analysts were calling for a 21.3% drop.

CEO Jeff Gennette said the company saw the most strength in home, beauty, jewelry and watches during the quarter, as consumers diverted more of their spending away from clothes and fancy shoes, and more toward accessories and items to dress up their homes.

Macy’s said it expects annual online sales will eclipse $10 billion within three years, as the department store operator anticipates that shoppers’ preference for internet purchases will stick beyond the pandemic.

M shares fell 97 cents, or 6.4%, to $14.31.