Macy's Inc. Announced Q4 and FY 2021 Financial Results that Beat by Wide Margin

Macy's (M) is the largest and oldest retail chain in the United States and globally. The headquarters is located in New York, New York, USA. Founded in 1858 by Rowland Hussey Macy, the retail chain includes 515 department stores, and deliveries are carried out in more than 100 countries of the world. More than 123,000 employees work in this chain of stores. Key people: Jeffrey Jennett (Chair/CEO). Subsidiaries: Macy's Furniture, GalleryMarket by Macy's, Macy's Backstage.

Let's look at the quarterly results of the company. In addition to prior year comparisons, Macy's provided comparisons with 2019 to evaluate its performance against the impact of the pandemic last year.

Diluted earnings per share of $2.44 and adjusted diluted earnings per share of $2.45 beat quarterly expectations (FY 2021 of $4.55 and $5.31, respectively, higher than anticipated). That compared to diluted earnings per share of $0.50 and adjusted diluted earnings per share of $0.80 in Q4 2020. By comparison, in Q4 2019, diluted earnings per share were $1.09 and adjusted earnings per share were $2.12.

Digital sales were up 12% compared to Q4 2020 and 36% compared to Q4 2019 (13% and 39% more for all of 2021 than in 2020 and 2019). Digital penetration accounted for 39% of net sales, an expected decrease of 5 percentage points compared to Q4 2020, but an improvement of 9 percentage points compared to Q4 2019.

Approximately 7.2 million new customers made Macy's-branded purchases, up 11% from Q4 2019, with 58% of these customers coming through digital channels in Q4 2021.

Gross profit margin for the quarter was 36.5% compared to 33.7% in Q4 2020, down 30 basis points from Q4 2019. (Gross profit margin for the year was 38.9% compared to 29.2% in 2020 and up 70 basis points from 2019).

Selling, general and administrative (SG&A) expenses were $2.4 billion, up $384 million from Q4 2020. (SG&A spent $8.0 billion in 2021, $1.3 billion more than 2020 and $951 million less than 2019).

Net credit card revenue of $264 million, up $6 million from Q4 2020. (Net credit card revenue was $832 million for all of 2021, up $81 million from 2020 and $61 million from 2019.)

Inventories for the year increased by 21% compared to 2020 and by 22% compared to 2019.

The company's Q4 results represented a strong end to 2021. Macy's Inc. exceeded both revenue and earnings expectations every quarter in 2021, despite Covid-19 disruptions, supply chain issues, labor shortages and rising inflation. The business is gaining momentum and serving more customers at more locations. The company has become stronger, more flexible and financially healthier. Thanks to the strategic capital allocation, the company believes it is well positioned to successfully navigate the macroeconomic hurdles that are expected in 2022.