Macy's Shares Soar After Solid Q4 Earnings, Raised Dividend, $2B Buyback

Macy's Inc M reported fourth-quarter FY21 sales growth of 27.8% year-on-year, to $8.66 billion, beating the analyst consensus of $8.43 billion.
Comparable sales increased 28.3% on an owned basis and up 27.8% on an owned plus licensed basis versus Q4 2020.
Comparable sales improved 6.6% on an owned basis and up 6.1% on an owned plus licensed basis versus Q4 2019.
Digital sales climbed 12% Y/Y versus Q4 FY20 and 36% versus Q4 FY19.
The operating margin was 11.7% versus 5.9% last year. Operating income for the quarter jumped 153% to $1.01 billion.
The gross margin was 36.5%, up 280 basis points from Q4 2020, and contracted 30 basis points from Q4 2019.
Adjusted EBITDA was $1.2 billion versus $789 million last year.
Adjusted EPS of $2.45 beat the analyst consensus of $1.96.
Macy's held $1.7 billion in cash and equivalents as of January 29, 2022. Net cash provided by operating activities for the twelve months totaled $2.7 billion.
Dividend: Macy's raised the quarterly dividend by 5% to $0.1575 from $0.15 per share. The dividend is payable on April 1, 2022, to shareholders of record on March 15, 2022.
Buyback: The company also has announced a $2 billion share buyback program.
"I am proud that Macy's, Inc. outperformed expectations on both the top and bottom lines every quarter in 2021, despite COVID-19 related disruptions, supply chain issues, labor shortages and elevated inflation," said chairman and CEO Jeff Gennette.
Outlook: Macy's sees FY22 sales of $24.46 billion – $24.7 billion, flat to up 1.0% growth versus 2021. The company expects FY22 adjusted EPS of $4.13 - $4.52.
Price Action: M shares are trading higher by 6.6% at $27.40 in premarket on the last check Tuesday.

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