Macy's swung to a profit in the second quarter on rising sales as newly vaccinated shoppers bought dresses, luggage and other goods.
The department store easily beat Wall Street expectations and it boosted its outlook for the year, sending shares up more than 5% before the opening bell Thursday.
Major retailers are rolling out quarterly earnings reports this week and the data has consistently pointed to a return to normalcy for U.S. shoppers after taking shelter over the past year. That also means that the online spending that rocketed during the pandemic is coming back down to earth.
Online sales fell 6% compared with last year, when they surged 53%. Still, online sales were up 45% when compared with the same stretch in 2019, before the pandemic.
Macy's pivoted to more casual item when it reopened after virus-related shutdowns, pared back inventory, launched curbside pickup for customers and permanently closed some stores.
Retailers are now monitoring the spread of the delta variant of COVID-19, which has led to more mask mandates. They’re also grappling with higher prices just as the temporary government stimulus and other benefits, which helped energize spending, are fading. Snarled supply chains continue to be an issue.
However, this week has shown that shoppers remain resilient.
Macy's reported earnings of $345 million, or $1.08 per share in the three-month period ended July 31. Adjusted earnings were $1.29 per share, far above the 23 cents industry analysts had expected, according to FactSet.
Last year, Macy's lost $431 million in the second quarter.
Revenue rose nearly 60% to $5.64 billion, better than the $5.01 billion Wall Street projected and better than last year's $3.56 billion.
The company said that it expects net sales for the year to be in the range of $23.5 billion to $23.95 billion. Its previous guidance was $21.73 billion to $22.23 billion. Industry analysts were expecting $22.09 billion. It also now expects adjusted earnings per share to be in the range of $3.41 to $3.75 per share, compared with previous projections of $1.71 to $2.12 per share.
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