Macy’s Forecasts Upbeat 2021 Sales on Stimulus Checks, Online Shoppers

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Macy’s store in New York. Shutterstock.

Macy’s Inc forecast 2021 sales largely above Wall Street estimates on Tuesday as the retailer bets on its growing online business and the return of customers to its department stores when Covid-19 vaccinations curb the impact of the pandemic.

The upbeat outlook from the US retailer follows better-than-expected sales in the holiday quarter as stimulus checks and strong online demand eased the blow from the health crisis.

Macy’s expects sales between $19.75 billion and $20.75 billion for the full year, compared with analysts’ estimates of $20.13 billion, according to IBES data from Refinitiv.

Macy’s said its annual forecast accounted for some pandemic-related challenges in the spring season with momentum building in the back half of 2021.

On Monday, the US Covid-19 death toll surpassed 500,000.

Retailers are expected to benefit from another wave of stimulus-driven consumer spending in the coming months should the US Congress pass the Biden administration’s support plan that includes sending a $1,400 check to households.

Same-store sales on an owned basis fell 17 percent in the fourth quarter ended January 30, compared with Wall Street estimates of a 16.60 percent fall, according to IBES data from Refinitiv.

Macy’s online sales jumped 21 percent in the quarter as it pushed for faster delivery times with stores being used to fulfill orders made on its website and app as more consumers move their shopping online.

The company now expects annual online sales to reach $10 billion within the next three years.

Beauty, home, jewellery, and casual apparel performed well in the quarter, Macy’s said.

Net sales fell to $6.78 billion in the fourth quarter from $8.34 billion in the year-earlier quarter but beat estimates of $6.50 billion.

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Shares of Macy’s were up about 2 percent in premarket trading, after also handily beating expectations for quarterly profit.

Excluding one-time items, the company reported a profit of 80 cents per share, above expectations of 12 cents.

By Aishwarya Venugopal and Melissa Fares; editors: Sriraj Kalluvila and Steve Orlofsky.

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