Macy’s closes tough year with hope for 2021

Macy’s is looking NEW YORK — ahead to a year of recovery and rebuilding from the pandemic as the iconic department store chain offered annual forecasts that beat Wall Street forecasts.

Driving that optimism is Macy’s push to accelerate online sales, while focusing on physical stores at top-tier malls and modernizing its supplier network to speed up deliveries.

As a result, Macy’s believes annual sales will reach $20.75 billion this fiscal year, exceeding the roughly $17 billion that Wall Street had been projecting. Macy’s also expects adjusted earnings per share in the range of 40 cents to 90 cents for the year, much better than the $2.92 loss that analysts forecast, according to FactSet.

The company said on Tuesday it expects digital sales to reach $10 billion within the next three years and that the online side will become even more profitable. Still, the department store defended its physical store business, noting that online sales are two to three times higher in markets with Macy’s stores.

The forecast came as Macy’s posted a fourth-quarter profit drop of 52%. Sales slid nearly 19%.

Macy’s faced challenges even before the pandemic forced the chain and its peers to close temporarily last spring to reduce spread of the virus. The retailer was wrestling with increasing competition from online players like Amazon and discounters like Target and Walmart. But the pandemic accelerated shoppers’ shift to online spending and increased the dominance of big box stores, which were allowed to stay open because they were deemed essential.