Macy's reported second-quarter earnings that beat expectations and raised its full-year guidance as shoppers returned to its stores.
The department store giant’s net income totaled $345 million, or $1.08 per share, for the quarter ended July 31, compared to a loss of $431 million, or $1.39 per share, in the year-ago period. Adjusted earnings per share of $1.29, way ahead of analysts’ estimates for $0.23.
Operating income was $597 million versus an operating loss of $631 million in the 2020 quarter.
Sales rose to $5.65 billion from $3.56 billion and topped estimates of $5.01 billion. Comparable sales on an owned basis jumped 61.2%.
E-commerce sales fell 6% from the same quarter last year, a time when Macy’s stores were not fully open and when shoppers were largely still buying online. Online sales rose 45% on a two-year basis and accounted for 32% of net sales. The retailer said it brought about 5 million new customers into the Macy’s brand, a 30% increase compared to second quarter 2019.
Macy’s second-quarter results were strong across all three of its banners: Macy’s, Bloomingdale’s and Blue Mercury, said chairman and CEO Jeff Gennette.
"Our momentum in the first quarter accelerated in the second quarter as we successfully reengaged core customers and attracted new, younger customers with new brands and categories," he stated. “The Polaris strategy is working. We have meaningfully improved the fundamentals and overall health of our business, and we are well underway building a stronger Macy’s, Inc. for the future.”
Macy's ended the second quarter with approximately $2.1 billion in cash. The company said its strong cash position will allow it to invest in profitable growth, while de-levering the balance sheet. It also will allow it return capital to shareholders through two actions, including reinstating its dividend at 15 cents per share on Macy's common stock, resulting in an annual return of cash to shareholders of nearly $200 million. Also, the board has approved a share buyback program of $500 million.
Macy’s raised its outlook for net sales in fiscal 2021 to a range of $23.55 billion to $23.95 billion, up from its previous forecast of $21.73 billion to $22.23 billion.
It expects full-year adjusted earnings to be in a range of $3.41 to $3.75 per share, up from guidance of $1.71 to $2.12 a share.