The company generated $5.4 billion in revenue, which was higher than the $5.2 billion analysts had expected. Meanwhile, the company’s net income totaled $239 million, or 76 cents per share. This was a significant improvement over the same quarter last year when Macy’s reported a loss of $91 million, or 29 cents per share.
The company earned $1.23 per share, which was higher than the 31 cents analysts had expected.
The improvements came as a result of both an increase in digital sales and an increase in the company’s customer base.
Macy’s digital sales increased by 19 percent year over year and were 49 percent high on a two-year basis. The company’s digital business accounted for a third of its sales, with 41 percent of new customers coming through digital channels. Overall, the company added 4.4 million new customers thanks to an improving economic environment, according to Macy’s CEO Jeff Gennette.
In a company announcement, Gennette noted that he is not worried about the ongoing supply chain issues impacting the company’s holiday sales. He also teased that the company is working on spinning off its digital business in the second half of 2022 — a move similar to Saks Fifth Avenue’s decision to separate its online business.
The decision comes as Jana Partners has taken a stake in Macy’s business. The activist investor is putting pressure on Macy’s to spin off its online business to fetch a higher valuation.
Gennette told analysts that the company is consulting with AlixPartners to assess its business.
“We also recognize the significant value the market is assigning to pure e-commerce businesses,” he said. “And as we look at the landscape today, we are undertaking additional analysis that could help inform our long-term strategy to further unlock value for Macy’s.”
Macy’s shares went up by 10 percent in premarket trading following the announcement.
