“While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” said CEO Jeff Gennette.
Macy’s (M) – Get Macy’s Inc Report posted better-than-expected first quarter earnings Thursday, while boosting its full-year profit guidance, as the retailer capitalized on retail demand despite what it called a “challenging operating environment.”
Macy’s said adjusted earnings for the three months ending in April, the group’s fiscal fourth quarter, came in at $1.08 per share, up more than 175% from the same period last year and well ahead of the Street consensus forecast of 39 cents share. Group net sales, Macy’s said rose 13.55% to $5.348 billion, narrowly topping analysts’ estimates of a $5.33 billion tally.
Same-store sales were up 12.8%, Macy’s said, smashing the Refinitiv forecast of a 1.3% improvement.
“Our company delivered solid results in the first quarter despite a challenging operating environment. We delivered strong earnings, beating our estimates, and sales that were in line with our expectations,” said CEO Jeff Gennette. “While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop”
“We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods. Our omnichannel ecosystem, which spans the value spectrum, has supported our ability to flex our wide assortment of categories, products and brands to capture consumer demand despite the volatile environment,” he added. “As we look ahead to the rest of 2022, we remain focused on our customers and the successful execution of our Polaris long-term growth strategy. We believe that the efficiencies we built into our business enable us to navigate through the current uncertain macro environment.”
Looking into the 2022 financial year, Macy’s reiterated that said it sees net sales in the region of $24.4 billion to $24.7 billion, but lifted its adjusted earnings forecast to between $4.53 to $4.95 per share, up from its prior forecast of $4.13 to $4.52 per share.
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Macy’s shares were marked 15% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $22.10 each.
Inflation, input cost pressures and supply chain snarls have taken their toll on the U.S. retail sector this quarter, culminating in disappointing first quarter earnings and outlooks from giants Walmart WMT, Target TGT and Amazon AMZN this month.
The S&P 500 Retailing Group is down around 24% so far this quarter, its worst performance since 1990, as investors expect more pain to come from both the Fed’s rate-based inflation fight and the highest nominal domestic gas prices on record, which continue to pinch household budgets and discretionary spending.
U.S. retail sales growth steadied in April, data from the Commerce Department indicated earlier this week, as record high gas prices and surging inflation failed to deter spending in the world’s biggest economy.
Inflationary pressures remain acute, however, even as the Commerce Department’s headline April reading eased from a 40-year high to 8.1%, with so-called core inflation, which strips-out volatile components such as food and energy prices, rising 6.2%, near the highest since February of 1991.