FILE PHOTO: People wait in line at Macy’s before Black Friday sales in the Manhattan borough of New York City, New York, U.S., November 26, 2021. REUTERS/Jeenah Moon/File Photo
February 22, 2022
(Reuters) -Macy’s Inc on Tuesday decided against a push by an activist investor to spin off its online business and forecast better-than-expected annual sales after a bumper holiday season, during which it kept its shelves well-stocked.
The department store chain also announced a $2 billion share buyback plan and raised its quarterly dividend by 5%, sending its shares up more than 8% in premarket trading.
Macy’s posted a 12% sales jump in its digital business, with the company’s valuation rising to $7.7 billion from $6.9 billion in October last year when activist investor Jana Partners urged the company for a spinoff.
Jana had argued in its presentation that the online business could be worth a multiple of Macy’s market capitalization. Earlier this month, Jana said it cut its holdings in Macy’s by 84% in the last months of 2021, before which it held a 1.5% stake.
“We are more confident in our path forward as one integrated company,” Chief Executive Jeff Gennette said.
Macy’s, which also owns Bloomingdale’s and beauty store chain Bluemercury, has been beefing up its e-commerce division. As a result, its digital channel garnered 58% of the 7.2 million new customers that it added in the fourth quarter.
The company also benefited from higher prices and its efforts to speed up shipments for the holiday quarter, helping it offset any impact from the Omicron variant and an early start to the shopping season.
Macy’s expects net sales between $24.46 billion and $24.70 billion for fiscal 2022, above expectations of $24.23 billion, according to Refinitiv data.
Same-store sales at Macy’s owned stores open for at least a year surged 28.3% in the fourth quarter ending Jan. 29, topping analysts’ estimates. Excluding items, it earned $2.45 per share, above estimates of $2.02 per share.
(Reporting by Deborah Sophia in Bengaluru; Editing by Arun Koyyur)
Source: One America News Network
