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Monday, December 6, 2021

Macy’s Stocks Soar As Early Raises In Fundraising For The Holiday Weekend

On Thursday, Macy’s Inc. boosted its annual sales and profit forecast, signaling that the department store chain had avoided supply chain problems and was well stocked for the all-important holiday season.

The retailer also beat market estimates in quarterly sales and said it is considering spinning off its e-commerce business, which saw its shares soar more than 20 percent to a three-year high.

After last year’s market-driven downturn, department stores have seen a surge in sales in recent months as Americans spend more money on perfumes, dresses and formal wear.

Rival Kohl’s Corp. also improved its annual forecasts, but was low in inventory levels due to a shortage of a key women’s apparel category.

Retailers have faced pressure this year from supply congestion, closed factories in Asia and a shortage of raw materials. Leading companies such as Nike Inc. have warned of product shortages during the holiday season.

But Macy’s moves to speed up shipments and order groceries earlier in the year helped boost inventory levels by 19.4% in the third quarter and is expected to stave off a hit from the holiday supply crisis.

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“I have what it takes to do what I need to do on the holidays,” Macy’s CEO Jeff Gennett told Reuters.

“We are working hard to provide our customers with sufficient inventory, which limits supply to some of our competitors.”

Macy’s expects net sales for the year to be $ 24.12 billion to $ 24.28 billion, up from $ 23.55 billion to $ 23.95 billion previously.

A 1% increase in gross margins from pre-2019 levels, fueled by higher full-price sales, was also a relief at a time when larger retailers such as Walmart Inc. and Target Corp. are struggling with higher supply costs, he said. Berna Barshai, Empire Financial Research analyst.

Meanwhile, Kohl’s has increased spending to speed up shipments and prioritized new promotional-related products to prepare for the holiday season.

“We are well prepared for the holiday season as new arrivals (shipments) continue to come in to support anticipated consumer demand,” said Kohl CEO Michelle Gass.

Author: Uday Sampat Kumar

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