What: The retailer, seeing more shoppers return to stores, turned profitable in its second quarter amid strong sales gains, motivating the company to raise its outlook for the year.

Why it is important: The company raised its guidance for this year. Sales are now seen reaching between USD 23.55 billion to USD 23.95 billion, compared to previous guidance of USD 21.73 billion to USD 22.23 billion.

Macy’s reported net income of USD 345 million for the quarter ended 31 July, compared to a loss of USD 431 million in the year-ago. Operating income was USD 597 million versus an operating loss of USD 631 million in the 2020 quarter. Sales rose to USD 5.65 billion last quarter, versus USD 3.56 billion in the year-ago period. Comparable sales were up 62.2%.

To support the momentum for the back half of 2021 and into 2022, Macy’s has begun selling the Toys “R” Us assortment online and will roll out Toys “R” Us to more than 400 Macy stores next year. The partnership was made with WHP Global, a New York based firm that acquires consumer brands and has a portfolio than includes Anne Klein, Joseph About, and Lotto, as well as a controlling interest in Toys “R” Us. The partnership, said Nata Dvir, Macy’s chief merchandising officer, “allows Macy’s to significantly expand our footprint in that category, while creating more occasions for customers to shop with us across their lifestyles.”

Pandemic impacted categories, including denim, luggage, dresses and other occasion-based apparel, came back strong. Categories that were solid throughout the pandemic, such as fragrance, fine jewelry and textiles, continued to perform well.

Digital sales declined 6% versus second quarter 2020 and grew 45% versus the second quarter of 2019. Digital penetration was 32% of net sales, a 22-percentage point decline from the second quarter of 2020, but a 10-percentage point improvement over second quarter 2019. The decline in digital sales compared to the prior year driven by shift of omnichannel customers to stores, which are now fully open.

The company brought about 5 million new customers into the Macy’s brand, a 30% increase compared to second quarter 2019.

Macy’s Inc. Raises Outlook After Strong Quarter

Macy's Reports Second Quarter 2021 Results