Macy's Stock Soars After Solid Q3, Raised FY21 Outlook

Macy's Inc M reported third-quarter FY21 sales growth of 36.3% year-on-year, to $5.44 billion, beating the analyst consensus of $5.20 billion.
Comparable sales increased 37.2% on an owned basis and up 35.6% on an owned plus licensed basis versus Q3 2020.
Comparable sales improved 8.9% on an owned basis and up 8.7% on an owned plus licensed basis versus Q3 2019.
The operating margin was 9.6%, and operating income for the quarter was $523 million.
The gross margin was 41%, up 540 basis points from Q3 2020 and up 100 basis points from Q3 2019.
Adjusted EBITDA was $765 million versus $159 million last year.
Adjusted EPS of $1.23 versus $(0.19) last year.
Macy's held $316 million in cash and equivalents as of October 30, 2021. Net cash provided by operating activities for the nine months totaled $841 million.
Inventory was down 15.5% from Q3 2019.
"The results were driven by the effective execution of the Polaris strategy and an improved economic environment," said chairman and CEO Jeff Gennette.
Macy's also announced plans to launch a curated digital marketplace platform to accelerate its Polaris strategy and unlock new sustainable and profitable growth opportunities. The marketplace platform is expected to launch in the second half of 2022.
Outlook: Macy’s raised FY21 sales guidance to $24.12 billion - $24.28 billion (prior $23.55 billion - $23.95 billion) versus the consensus of $23.78 billion.
The company raised FY21 adjusted EPS outlook $4.57 - $4.76 (prior $3.41 - $3.75) versus the consensus of $3.89.
Price Action: M shares are trading higher by 10.9% at $34.2 in premarket on the last check Thursday.

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