Macy’s predicts strong 2022 after holiday sales surge, not to separate online unit

People line up at Macy’s ahead of Black Friday sales in the New York borough of Manhattan, New York, U.S., November 26, 2021. REUTERS/Jeenah Moon/File Photo

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Feb 22 (Reuters) – Macy’s Inc (MN) decided on Tuesday not to entice an activist investor to spin off its online business and forecast better-than-expected annual sales after a bumper holiday period, during which it has kept its shelves well. stocked.

The department store chain also announced a $2 billion share buyback plan and increased its quarterly dividend by 5%, sending its shares up more than 8% in premarket trading.

Macy’s reported a 12% increase in sales of its digital business, with the company’s valuation rising to $7.7 billion from $6.9 billion in October last year, when the investor activist Jana Partners has urged the company to split.

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Jana had argued in her presentation that online trading could be worth a multiple of Macy’s market capitalization. Earlier this month, Jana said she had reduced her stake in Macy’s by 84% in the final months of 2021, before which she held a 1.5% stake. Read more

“We are more confident in our path forward as an integrated company,” said chief executive Jeff Gennette.

Macy’s, which also owns Bloomingdale’s and beauty store chain Bluemercury, has bolstered its e-commerce division. As a result, its digital channel attracted 58% of the 7.2 million new customers it added in the fourth quarter.

The company also benefited from higher prices and its efforts to expedite shipments for the holiday quarter, helping it offset any impact from the Omicron variant and an early start to the shopping season.

Macy’s is forecasting net sales between $24.46 billion and $24.70 billion for fiscal 2022, above expectations of $24.23 billion, according to Refinitiv data.

Same-store sales at Macy’s-owned stores that have been open for at least a year jumped 28.3% in the fourth quarter ending Jan. 29, beating analysts’ estimates. Excluding items, it earned $2.45 per share, above estimates of $2.02 per share.

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Reporting by Deborah Sophia in Bengaluru; Editing by Arun Koyyur

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