Macy's gave strong guidance after both Macy's and Dillard's crushed earnings views for the fourth quarter. In addition, Macy's authorized a new $2 billion share buyback and hiked its dividend. Macy's stock and Dillard's opened sharply higher Tuesday, but then staged ugly reversals.
Macy's Earnings, Dillard's Earnings
Department store giant Macy's posted a 206% fourth-quarter EPS increase to $2.45 on a 28% sales gain to $8.665 billion. In the year-ago quarter, Macy's earnings and sales plunged double-digits amid the coronavirus pandemic and company-specific woes.
Analysts were expecting EPS of $2.01 and sales of $8.465 billion, according to FactSet.
In Q4 comparable sales rose roughly 28% vs. the year-ago quarter and about 6% vs. Q4 2019. Digital sales increased 12% vs. the year-ago quarter and 36% over Q4 2019. Macy's added 7.2 million new customers, an 11% increase vs. Q4 2019.
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The company began a transformation two years ago, helping to boost Macy's stock as it recovered along with other retailers from the pandemic bear market. "Today we believe the evidence is clear — our business is stronger, more agile, and financially healthier," said CEO Jeff Gennette in a news release Tuesday. The company authorized a new $2 billion share repurchase program and raised its quarterly dividend 5%. Macy's currently offers a 15-cent dividend, yielding 2.2%.
For 2022, Macy's guided EPS of $4.13-$4.52. The midpoint of 4.33 is higher than analysts' expectations for $4.09, FactSet shows. Macy's sees sales flat to up 1% vs. 2021. Analysts were expecting a 0.5% decline.
Also on Tuesday, Dillard's delivered a 357% EPS gain to $15.68, smashing estimates for $11.43. Revenue increased 25% to $2.016 billion, also ahead of views. Comparable retail sales increased 12% vs. Q4 2019. The company only provided guidance for certain financial statement items, such as capital expenditures.
Macy's Stock, Dillard's Stock
Shares of Macy's soared to 28.21 in morning trade but then reversed lower. Macy's stock closed down 5% at 24.42 on the stock market today.
Dillard's stock jumped to 260 intraday, but then fell 4.4% to 232.92. DDS stock has been trading largely sideways in a consolidation since early December.
Department store stocks had a banner 2021, despite wrestling with myriad supply and related shortages. In the holiday quarter, Macy's outperformed expectations despite lingering Covid-19 disruptions, supply chain issues, labor shortages and elevated inflation, chief executive Gennette said Tuesday.
