Macy’s beat Wall Street estimates during a fourth-quarter that topped off a big fiscal year for the company that Macy’s Chairman and CEO Jeff Gennette said reflects strategic initiatives that are improving operations and performance.
Macy’s net income for the quarter was $742 million, or $2.44 per diluted share, the company reported, versus $160 million, or 50 cents per diluted share, in the year-earlier period. Net income in the 2019 quarter was $340 million, or $1.09 per diluted share.
Net income adjusted for one-time events was $745 million, or $2.45 per diluted share, versus $253 million, or 80 cents per diluted share, in the year-prior quarter. Adjusted net income in the 2019 quarter was $661 million, or $2.12 per diluted share.
Macy’s beat a Yahoo Finance-published analyst average estimate of $1.99 and topped a revenue estimate of $8.47 billion.
Comparable sales in the quarter were up 28.3% in owned stores and up 27.8% in owned-plus-licensed stores year over year. Comps were up 43% and 42.9%, respectively, for the full year versus the previous year.
Macy’s posted net sales of $8.67 billion in the quarter versus $6.78 billion in the year-previous period and $8.34 billion in the 2019 quarter, the company noted. Operating income was $1.02 billion versus $401 million in the year-before period.
Digital sales gained 12% versus the 2020 fourth quarter 36% versus the 2019 period, Macy’s pointed out.
Digital penetration was 39% of net sales, a 5-percentage-point decline from the fourth quarter of 2020, but a 9-percentage-point improvement over the fourth quarter of 2019.
For the full year, net income was $1.43 billion, or $4.55 per diluted share, the company stated, versus a loss of $3.94 billion, or $12.68 per share, in the year earlier. Net income in 2019 was $564 million, or $1.81 per diluted share.
Adjusted net income was $1.67 billion, or $5.31 per diluted share, versus a loss of $688 million, or $2.12 per diluted share, in the year prior. Adjusted net income in 2019 was $906 million, or $2.91 per diluted share.
Macy’s posted net sales of $24.46 billion versus $17.35 billion in the year previous and $24.56 billion in 2019. Operating income was $2.35 billion versus an operating loss of $4.48 billion in the year before.
In a conference call, Gennette said the company is stronger than it was before the COVID-19 pandemic with a better, more engaging digital platform fully integrated with the overall operation; a more appropriate store footprint that takes into consideration the effect of physical locations on digital sales; simplified pricing and curated assortment; accelerated customer acquisition; modernized and data-driven supply function; and investment in tech and data science that has increased productivity and profitability.
Gennette said, “I am proud that Macy’s, Inc. outperformed expectations on both the top and bottom lines every quarter in 2021, despite COVID-19 related disruptions, supply chain issues, labor shortages and elevated inflation. Our business has momentum and is serving more customers at more touchpoints in their shopping journey.”
Adrian Mitchell, Macy’s CFO, added, “We generated $2.3 billion in free cash flow this year, a significant amount that allowed us to return capital to shareholders through our measured capital allocation plan while meaningfully improving the health of our balance sheet. The strength of our financial position offers the flexibility in 2022 to continue investing in growth opportunities, navigate the dynamic macro environment with agility, and further deliver on our commitment to enhance shareholder value.”