By Natalie Mojica
Thanks to increased prices, recent promotions, and inventory productivity, Macy’s reported higher margins than last year’s quarter sales.
Overall sales at Macy’s rose 28% to $8.67 billion in the fourth quarter, beating expectations. As a result, the company expects net sales between $24.46 billion and $24.7 billion this year, a 1% increase from 2021. Projected earnings of shares are expected to be between $4.13 and $4.52 a share. These figures are adjusted for inflation, supply-chain issues, labor shortages, and overall strains of the pandemic.
While Macy’s has been under pressure recently from activist investor Jana Partners LLC to split its online operation from its physical stores, it also announced it would not be going through the separation. Jana believes a stand-alone e-commerce business has the potential to be worth more than Macy’s market value, given how consumers prefer to do their shopping online more than ever.
“We are more confident in our path forward as one integrated company,” said Chief Executive Jeff Gennette.
Chief Financial Officer Adrian Mitchell also supports keeping Macy’s online and retail businesses integrated.
“It’s important to acknowledge that today we’re in just a much different competitive position than we were even just two years ago,” he said, showing how Macy’s long-term plan is reliable.
This decision impacts other big-name department stores, like Kohl’s and Nordstrom, facing similar pressures to separate into e-commerce spinoffs as Saks Fifth Avenue did.
However, Macy’s is experimenting with other initiatives to diversify and expand its business. From investing in brand partners to developing ‘Market by Macy’s’ and ‘Bloomie’s stores,’ the company is not complacent.
Gennette also revealed that Macy’s hired AlixPartners, a consulting firm, to advise how to materialize the potential of its online business instead of separating. Macy’s shares rose more than 4% following the news.