Why Macy's Skyrocketed Over 20% on Thursday
Shares of department store giant Macy’s M closed up 21.1% on Thursday as investors cheered an impressive beat-and-raise quarter. At one point, shares hit a three-year high of $37.95.
The retailer reported adjusted earnings of $1.23 per share and revenue of $5.4 billion, easily beating analyst targets. Comparable sales spiked a jaw-dropping 35.6% year-over-year, and digital sales grew 19%; Macy’s said its online business made up 33% of its top line.
The retailer now expects full-year revenue in the range of $24.12 billion and $24.28 billion, with adjusted earnings hitting $4.57 to $4.76 per share.
Macy’s also teased a 2022 launch of a digital marketplace for third parties to sell items on its site, as well as announced that it’s working with consulting firm AlixPartners to review its overall business and guide its long-term growth strategy. Both moves could amplify calls for Macy’s to follow in the footsteps of Saks Fifth Avenue and spin off its e-commerce division.
Fellow department store company Kohl’s KSS rallied 10.6% after reporting much better-than-expected Q3 results. Sales increased 16%, while same-store sales grew 14.7%. Digital sales jumped 6%, and e-commerce drove 29% of Kohl’s total revenue during the period.
Kohl’s also updated investors on its partnership with popular beauty retailer Sephora, saying that the addition of Sephora shops in Kohl’s stores is successfully attracting younger and more diverse customers. CEO Michelle Gass said that Kohl’s is seeing a mid single-digit lift to same-store sales at stores where Sephora shops have opened.
About 200 Sephora shops have opened so far, and Kohl’s plans to add many more in 2022. “When we’re up over 600 [Sephora shops] next year, you can only imagine the millions and millions of customers that we’re going to be introducing, so it’s already meaningful and that will only grow,” Gass added.
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