Macy’s shares soar as early efforts to stock up for the holidays bear fruit

Shoppers are seen outside Macy’s in the Manhattan neighborhood of New York, New York, United States, March 30, 2021. REUTERS / Caitlin Ochs / File Photo

Nov. 18 (Reuters) – Macy’s Inc (MN) on Thursday raised its full-year sales and profit outlook on Thursday, reporting that the department store chain had avoided supply chain grunts and was doing well stocked for the all-important holiday season.

The retailer also exceeded market estimates for quarterly sales and said it was examining a possible split in its e-commerce business, which activist investor Jana Partners has been pushing for. Its shares rose more than 20% to their highest level in three years.

After the crisis sparked by last year’s lockdown, department stores have made a comeback in recent months as Americans shifted their focus to perfumes, dresses and evening wear.

Rival Kohl’s Corp (KSS.N) also increased its outlook for the full year, but was unfavorable on inventory levels due to a shortage in the key women’s clothing category.

Retailers have been under pressure this year from shipping bottlenecks, plant closures in Asia and raw material scarcity, leading companies like Nike Inc (NKE.N) to warn of shortages. of products during the holiday season.

But measures taken by Macy’s to speed up shipments and product orders earlier in the year helped its inventory levels rise 19.4% in the third quarter and should avert a severe blow from the supply crisis. during the holiday period.

“I don’t think all of the supply chain issues have been resolved, but Macy’s advanced advice could reassure people that there will be enough products,” said Berna Barshay, analyst at Empire. Financial Research.

Macy’s forecasts net sales of $ 24.12 billion to $ 24.28 billion for the full year, compared to $ 23.55 billion to $ 23.95 billion previously.

He also delayed the planned closure of some stores, saying customers prefer to collect their online orders from points of sale in order to boost e-commerce.

“Delaying the closure of certain stores allows us to maintain a physical presence in the market, which is critical to growing our sales,” said CFO Adrian Mitchell.

Kohl’s, meanwhile, has increased spending to speed up shipments and prioritized new products related to promotional events to prepare for the holiday season.

“We are well positioned for the holiday season with new receptions (shipments) continuing to flow to meet anticipated customer demand,” said Michelle Gass, CEO of Kohl.

Uday Sampath report in Bangalore; Editing by Aditya Soni

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