Shares of Macy’s stock were up nearly 7% in premarket trading, to $26.70.
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Shares of Macy’s stock were rising in premarket trading, after the department-store giant posted fiscal fourth-quarter earnings that beat expectations and hiked its annual dividend.
Shares were up 7% to $27.49.
The company posted a revenue of $8.67 billion compared with the $8.47 billion expected by FactSet analysts. Adjusted earnings per share were $2.45. Analysts were expecting $2 a share.
Same-store sales, on an owned-plus-licensed basis, rose 27.8% year over year.
Macy’s (ticker: M) also gave its outlook for fiscal 2022, calling for sales to range between $24.46 billion and $24.7 billion, which would be flat to up 1% compared with 2021. Analysts had been looking for revenue of $24.3 billion, which would have been a slight decrease from the prior year. The company sees adjusted earnings per share for the year to be between $4.13 and $4.52.
The company also authorized a new $2 billion share buyback program and announced a 5% dividend increase.
Macy’s said it won’t be separating its digital segment from its physical stores, following pressure from an activist investor to spin off the fast-growing segment of the department-store’s operation.
“The Board determined that an integrated, omnichannel Macy’s Inc. with an acceleration of certain Polaris initiatives, will deliver greater value to our shareholders than a separation of digital and physical assets at either the enterprise or brand levels,” the company said. Investors had been looking for an update on the process, after the retailer said in November that it was working with Alix Partners to evaluate the potential spinoff.
The news shouldn’t come as a surprise though, Jefferies analyst Stephanie Wissink wrote in a research note Tuesday morning, noting that the activist heat had cooled and the complexity and risk ratio was high for a potential spinoff. She rates the stock a Buy with a price target of $45.
Generally, other analysts remain optimistic about Macy’s too. Out of the 12 analysts that have a FactSet rating on the stock, seven say the stock is a Hold, four say it’s a Buy, and one says it’s a Sell.
The stock has gained 68% the last 12 months.
This is a developing story. Check back for updates.
Write to Logan Moore at [email protected].
