Macy’s earnings beat Wall Street on less promotion and 'strategic markdowns'
Retailer will look to solidify its modern department store positioning in 2023
Macy's posted better-than-expected quarterly earnings on Thursday after the retailer decided to reduce its promotion and take on strategic markdowns.
The company's margins fell just 2 percentage points to 34.1%, compared with contemporaries like Kohl's, whose margins slipped by 10 percentage points.
Jeff Gennette, Macy’s chair and CEO, said "Despite an increasingly volatile macroeconomic climate, we remained agile, pivoted to meet customer demand and elevated our approach to inventory management."
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"We were competitive but measured in our promotions, took strategic markdowns and intentionally did not chase unprofitable sales," he added. "As we look to 2023 and beyond, we believe our five growth vectors which include our private brands reimagination, off-mall expansion, online marketplace, luxury brands acceleration and personalized offers and communication will further solidify our modern department store positioning."
Over the fourth quarter, Macy’s reported net sales reached $8.3 billion, down 4.6% versus the fourth quarter of 2021; and down 0.9% versus the fourth quarter of 2019.
Meanwhile, diluted earnings per share peaked at $2.44 after hitting $2.45 in the fourth quarter of 2021. The company’s guidance outlined revenue between $8.16 billion and $8.28 billion.
For the year, net sales reached $24.4 billion in 2022, down 0.1% versus 2021; and down 0.5% versus 2019. Diluted earnings per share made $4.19 while adjusted diluted earnings per share settled at $4.48.
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Macy’s reduced its full year forecast in August 2022 after reporting a 2.7% dip in comparable sales and was predicted to lose millions when compared to the same period one year ago.
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Reuters contributed to this report.