Macy’s jumps 22% after huge earnings beat as Americans shake off COVID-19 fears and return to in-store shopping

A view outside Macy's in Herald Square amid the coronavirus pandemic on March 17, 2021 in New York City.
A view outside Macy's in Herald Square, New York.
  • Macy's jumped to a more than two-year high after the chain posted second-quarter earnings that beat expectations.
  • It also raised its guidance for the year as vaccinated Americans return to in-store shopping.
  • The department store also announced a partnership that will bring Toys "R" Us back to Macy's stores by 2022.
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Shares of Macy's jumped as much as 22% to a more than two-year high on Thursday after the department store chain posted second-quarter earnings that beat expectations and raised its guidance for the year as vaccinated Americans return to stores.

The stock surged 22.65% to $22.17 on Thursday at 1:28 p.m. ET. It was trading 18.40% higher at $21.40 as of 2:28 p.m. ET.

The company said that same-store sales spiked a whopping 62% in the quarter. It also announced plans to reinstate its regular quarterly dividend at 15 cents per share and its board-approved $500 million stock buyback program.

Macy's momentum in the first quarter accelerated in the second thanks to a reengaged core customer base, new and younger shoppers, as well as fresh brands and categories, company chair and CEO Jeff Gennette said in a statement.

"Through the Macy's, Inc. portfolio and our omnichannel approach, we provide a compelling, seamless integration between physical stores and digital shopping to most effectively meet the needs of our customers," he said.

The company on Wednesday posted a net income that increased to $345 million, or $1.08 per share, compared with a net loss of $431 million, or $1.39 per share, in the same period last year.

Macy's adjusted earnings were $1.29 per share during the quarter, excluding one-time adjustments. Analysts by Refinitiv were expecting a mere $0.19 a share.

Revenue meanwhile, rose almost 60% to $5.65 billion, compared to the $3.56 billion in the same period last year, beating analyst estimates of $5.01 billion.

Macy's boosted its net sales outlook to $23.55 billion to $23.95 billion, from $21.73 billion to $22.23 billion.

The company expects full-year adjusted earnings of $3.41-$3.75 per share, up from $1.71-$2.12 a share.

The company on Thursday also announced a partnership with WHP Global to bring Toys "R" Us back to its stores. Shoppers can buy toys from the toy store chain online and can purchase these from more than 400 Macy's stores nationwide by 2022.

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