New York – Macy’s Inc. is planning on a strong home business this year, although inventory still lags in spots.
Stock shortfalls for mattresses and private label home programs have been largely resolved. The company continues to have some issues with housewares and furniture, chairman and CEO Jeff Gennette told analysts during today’s fourth quarter conference call.
“We expect the home business is going to stay strong and elevated,” he said, noting the categories are solid performers at both Macy’s and Bloomingdale’s. Fine jewelry and fragrances are the other stand-outs.
“If you look at our textiles business, which is mostly private brands, we expect those trends to continue all through 2021, so we’ve placed those bets,” he added.
Online, the company expanded its home office and outdoor furniture offerings last year, along with baby care, home fragrances and other categories that appeal to its newer, under-40 shoppers. It plans for additional expansion, and Gennette noted that the consumer-direct delivery model via its platform is particularly successful in the home segment.
Other key takeaways from the call:
- The Backstage off-price division out-performed comp at Macy’s by roughly three times last year. The company will open another 35 units this year.
- Macy’s is testing off-mall concepts in Dallas, Atlanta and the DC metro area as part of a new omni model. Those tests include Backstage and Bloomindale’s outlets.
- The company remains on track to close a total of 120 mall locations. Some 60 stores have already closed or will close soon in C and D malls. Macy’s Inc. is focused on its presence in A and B malls.
- Digital sales are two to three times higher per capita in markets where the company operates physical store locations. It also sees digital sales decline in markets where it closes stores.
- The company picked up nearly seven million new customers in Q4, mostly via digital.
- With broad disruption in retail, the company sees $10 billion in competitor revenue up for grabs going forward.
Macy’s Inc.’s results for the fourth quarter beat expectations it had outlined at the end of Q3.
For the quarter ended Jan. 30, Macy’s Inc. reported:
- Net sales down 22% to $6.78 billion, with comp down 17.1%.
- Digital sales grew 21% year-over-year, with digital penetration at 44% of net sales.
- Net income tumbled 53% to $160 million, or $0.50 per diluted share.
For the full fiscal year:
- Net sales fell 27% to $17.3 billion. Macy’s Inc. did not break out comp or digital penetration for the year.
- The company swung to a net loss of $3.9 billion, or $12.68 per diluted share, compared to net income of $564 million, or $1.81 per diluted share, in the previous fiscal year.