Macy’s Beats Expectations In Q1 2022
Macy’s beats expectations as comparable store sales rose 12.4 percent and the company reported fully diluted earnings of $0.98. That compares to $0.32 in the first quarter of 2021.
Macy’s comparable store sales were up 10.7 percent and up 10.1 percent on an owned-plus licensed basis. Bloomingdale’s comparable sales jumped 28.1 percent and on an owned-plus licensed basis were up 26.9%. The company indicated that approximately 44.4 million active customers shopped the Macy’s brand and 4.0 million active customers shoppe the Bloomingdale’s brand on a twelve-month trailing basis.
Both Dillard’s, Nordstrom
Macy’s did indicate during their conference call that demand for active and casual wear and soft home categories was less. This downshift came at the same time, as management noted a loosening of supply chain constraints. There are fewer ships waiting at ports and overland delivery is quicker, albeit there are further negotiations at the Los Angeles port.
Macy’s SG&A expense was 35.1 percent in the quarter. This is an improvement of 200 basis points over last year’s SG&A expense, and reflects growing sales momentum and expense management throughout the company.
There were fewer sales, according to management. It can be seen in merchandise margins improving year over year from 39.6 from 38.6. Part of this is also the greater interest in dresses. Men’s tailored clothing and women’s contemporary apparel.
The company indicated that $24,460 million to $24,700 million is still in the ball-park but that earnings have moved up slightly, reflecting first quarter $600 million share repurchases. Macy’s estimates have moved from $4.13 – $4.52 to $4.53 to $4.95. Last year the company has sales of $24,460 million and fully diluted earnings of $4.55.
Jeff Gennette, CEO of Macy’s Inc. commented: “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. While macroeconomic pressures on consumer spending increased during the quarter, our customer 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.”
POSTSCRIPT: Macy’s sees the first signs of tourism which should also add to the sales momentum as U.S. workers return to their traditional place of work. While prices have moved up, both Nordstrom and Macy’s that there is little resistance to higher prices. Today Macy’s is trimmer in executives and bolder in its merchandising.