By Dhirendra Tripathi
Investing.com – Macy’s (NYSE:M) stock surged 6% in premarket trading Tuesday after the retailer’s fourth quarter numbers came well ahead compared to 2020 and 2019.
Categories that were solid throughout the pandemic, including home, fragrances, jewelry, watches, and sleepwear, continued to see strong sales performance, Macy’s said, while the fourth quarter had its own share of winners too. This included strong sales of luxury handbags, fine jewelry, men’s shoes, and fragrances.
Adding to the gains in the stock is a new $2 billion share buyback that follows the $500 million repurchases the company completed in the fourth quarter. The company will also pay a 5% higher quarterly dividend of 15.75 cents per share.
Fourth quarter margins expanded due to higher pricing of products as well as tighter control on promotion expenses.
Net sales in the fourth quarter rose 28% to $8.7 billion as more customers shopped and digital sales rose. The retailer attracted around 7.2 million new customers during the quarter with 58% of them coming through the digital channel. Quarterly digital sales rose 12% on year-on-year basis, but it also spent more on delivery as more people ordered online and it had to bear holiday delivery expense surcharges.
Macy's expects net sales to grow up to 1% to $24.46 billion-$24.70 billion in the current financial year. Adjusted profit per share is seen at $4.13-$4.52.
For the ongoing quarter, it expects net sales of $5.27 billion-$5.37 billion with an adjusted EPS of 81 cents at the center of its guidance range.
Adjusted EPS in the fourth quarter more than tripled to $2.45 due to higher impairment and interest costs in the same period a year ago.