Macy's (M) shares surged higher Thursday after the retailer posted better-than-expected third quarter earnings, while lifting its full-year profit forecast, defying warnings of downward shopping trends heading into the holiday season.
Macy's said adjusted earnings for the three months ending in October, the group's fiscal third quarter, came in at 52 cents share, down more than 57% from the same period last year but well ahead of the Street consensus forecast of 19 cents share. Group net sales, Macy's said fell 3.9% to $5.2 billion, essentially matching analysts', while same-store sales were down 3.1%.
Looking into the 2022 financial year, Macy's said it sees net sales in the region of $24.34 billion to $24.58 billion, with adjusted in the range of $4.07 to $4.20 per share, up from its spring forecast of between $4.00 and $4.20 per share
“Our Polaris strategy is working. In the third quarter, we achieved solid top line results and a strong beat to our bottom line guidance. Macy’s brand position as a style and fashion source resonated with our customers, while luxury continued to outperform at Bloomingdale’s and Bluemercury,” said CEO Jeff Gennette.
“Retail is detail, and our talented and agile team are executing well to compete. We know the consumer is under increasing pressure and has choices on where to spend," he added. "As a leading gifting destination with fresh inventory across the value spectrum, we are ready to meet our customers’ needs this holiday season.”
Macy's shares were marked 11.3% higher in early Thursday trading to change hands at $21.94 each, move that would nudge the stock into positive territory for the past six months.
The group said last month it plans to hire more than 40,000 seasonal workers to handle its holiday shopping workflow, a notable decline from the near 80,000 it brought on board last year -- including permanent staff -- suggesting muted expectations for the January quarter.
Target's (TGT) warning Wednesday, as well, of "dynamic changes" in consumer spending habits over the final week of October, which the retailer said had extended into the current month, has also raised concerns for holiday season sales. Walmart (WMT), however, had a solid third quarter thanks in part to its market-leading position in the grocery space.
