June 15, 2021

Macy’s allays holiday season sales worries, shares rise 5per cent

2 min read

Macy’s Inc reported just a 0.6per cent drop in holiday period same-store sales on Thursday, quelling fears of a more dramatic fall in the department store operator’s numbers for the crucial annual shopping season after an earlier profit warning.

People carry shopping bags from Macy's Herald Square during early opening for the Black Friday
FILE PHOTO: People carry shopping bags from Macy’s Herald Square during early opening for the Black Friday sales in Manhattan, New York City, U.S., November 28, 2019. REUTERS/Andrew Kelly

REUTERS: Macy’s Inc reported just a 0.6per cent drop in holiday period same-store sales on Thursday, quelling fears of a more dramatic fall in the department store operator’s numbers for the crucial annual shopping season after an earlier profit warning.

The New York-based company’s shares rose over 6per cent in premarket trading.

Macy’s, which cut its annual profit forecast in November blaming weak international tourism and sluggish mall traffic, is among the first major corporate names to report sales for the holiday season – seen as a barometer for the health of U.S. consumer spending.

The company’s holiday sales benefited from strong online sales and demand for gift products, Macy’s Chief Executive Officer Jeff Gennette said.

U.S. consumers are increasingly spending more money online rather than traveling to physical stores during the holiday season, forcing traditional brick-and-mortar retailers to build their apps with more shopping and delivery options.

U.S. e-commerce sales in the period from Nov. 1 through Christmas Eve rose 18.8per cent, according to a Dec. 25 report by Mastercard Inc , while overall holiday retail sales, excluding autos, rose just 3.4per cent.

The 0.6per cent reported drop at Macy’s owned and licensed stores was for the months of November and December.

The months make up the vast majority of fourth-quarter comparable sales, which analysts had estimated to fall 1.8per cent, according to IBES data from Refinitiv.

(Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli)