Macy’s just beat earnings and revenue expectations for the first quarter, despite what has been a generally rough period for retailers. In a call with investors, executives highlighted the company’s vast array of offerings for consumers across the income spectrum, as inflation soars at record-high levels.
Earnings per share for the department store retailer were $1.08, with a net income of $286 million. Revenues were $5.35 billion. Digital sales grew 2% over 2021 and 34% over 2019.
Macy’s accomplished these better-than-expected results in spite of uncertainties from lockdowns in China and labor negotiations in the L.A. ports. As such, the company reaffirmed its sales outlook and raised its profit guidance for fiscal year 2022,.
Macy’s shares were up close to 14% this morning on the news.
Executives from Macy’s, which also owns Bloomingdale’s, highlighted the retailer’s unique proposition for consumers across a range of incomes and purchase abilities.
CEO and chairman Jeffrey Gennette said the company operates “across the value spectrum, from off-price to luxury,” which, in part, allows it to “flex with consumer demand.”
“During the first quarter, all income tiers continue to engage with us, led by the higher income and middle income consumers,” Gennette said. “These trends show the benefit of our balanced portfolio across nameplates.”
Within the off-price realm, Macy’s has seen recent success with the expansion of its Backstage concept. The department store chain in March announced the rollout of 37 additional Backstage store-within-store concepts across the U.S. as the chain approaches 300 locations across the U.S. Just last weekend, the company launched a 15,000-square-foot store Backstage shop on the eighth floor of its New York City flagship store in Herald Square, a crucial retail hub for local shoppers and tourists alike.
These shops, which feature in-season items at marked down prices, typically occupy 11,000 to 16,000 square feet of retail space and include items across an array of categories, including apparel and footwear for men, women and kid’s as well as toys, houseware, beauty and accessories.
At the same time, Macy’s also offers a range of options for its luxury-focused consumers as well, via Bloomingdale’s as well as certain brands within Macy’s stores. In Q1, sales at Bloomingdale’s on an owned-plus-licensed basis were up 26.9%, driven by sales of dresses, men’s tailored, men’s and women’s contemporary apparel and luggage.
According to Gennette, luxury sales were a standout category in Q1, “as shopping behavior among high-income consumers has so far remained less affected by inflation.”