Macy’s Shares Head Higher on Online Growth Boosting Sales

Despite department store chain retailer Macy’s swinging to a loss in the last quarter, share prices still headed higher as the company reported stronger than expected online growth that boosted sales.

The company revealed that its second-quarter digital sales were up 53% from a year ago while sales online and at Macy’s stores open for at least 12 months were down 35.1%.

Macy’s said luxury categories at Bloomingdale’s outpaced internal expectations. That helped it report a narrower loss and higher overall revenue than analysts were expecting.

CEO Jeff Gennette said the department store operator is planning conservatively for the remainder of 2020. No financial forecast was given but the retailer is planning for its same-store sales to be down in the low-to-mid 20% range during the fall season. It said its profit margins are expected to peak in the third quarter, as shipping expenses and other heightened costs during the holidays are set to weigh on earnings toward the end of the year.

“The time between Thanksgiving and Christmas is still going to be incredibly important,” Gennette told analysts Wednesday, even if shopping begins earlier.

Shares were up nearly 6% in premarket trading on Wednesday on the results.

For the second quarter, Macy’s reported a loss per share of 81 cents while analysts had expected a loss of $1.77 according to Refinitiv data. Revenue at $3.56 billion was ahead of the $3.48 billion expected, per Refinitiv.

It was this past June that Macy’s said it would slash 3% of its workforce, or 3,900 corporate jobs, to reduce costs during the pandemic. The company has said it expects to save about $365 million through the layoffs in fiscal 2020.

Macy’s shares are down nearly 60% this year.

Disclaimer: We have no position in Macy’s Inc. (NYSE: M) and have not been compensated for this article.