Macy’s stock jumps after earnings beat, dividend hike, $2 billion share repurchase program announced

Comparable sales on an owned basis were up 28.3%, and increased 27.7% on an owned-plus-licensed basis. The FactSet consensus was for a comparable sales increase of 25.1%.

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Bloomingdale’s comparable sales were up 37.8% on an owned basis and up 37.6% on an owned-plus-licensed basis. And Bluemercury comparable sales rose 30.9% on both an owned and an owned-plus-licensed basis.

Macy’s M, +1.98% announced a new $2 billion share repurchase program after completing a previous $500 million program.

The company also raised its dividend by 5% to 15.75 cents per quarter, payable on April 1 to shareholders of record as of close of business March 15.

Activist investors Jana Partners had called for Macy’s to separate its e-commerce business from its brick-and-mortar stores. The company has completed a business review and says it has determined that continuing as an omnichannel operation would be the better option.

See: Macy’s upgraded but Nordstrom downgraded, as department store category continues to shift

“Key to the Board’s decision-making were the high separation costs and ongoing costs from operating separated businesses, as well as high execution risk for the business and the company’s customers. As a result of the review, the company is accelerating Polaris initiatives that span digital, brand partners, private label, marketing and loyalty and the expansion of off-mall, small-format Market by Macy’s and Bloomie’s stores,” the company said in a statement.

Polaris is Macy’s turnaround strategy, which was launched two years ago.

For 2022, Macy’s is guiding for sales of $24.46 billion to $24.70 billion, and adjusted EPS of $4.13 to $4.52.

The FactSet consensus is for sales of $24.34 billion and EPS of $4.09.

Macy’s stock has run up 68.2% over the last year while the S&P 500 index SPX, -0.72% is up 12.2% for the period.