Macy's closes out a horrendous year with hope for 2021

New York — Macy's fourth-quarter profit plunged 52% and sales slid nearly 19%. In the context of a year spent under the weight of a pandemic, that was seen as a pretty good ending to 2020 for the besieged department store.

Shares rose more than 3% before the opening bell Tuesday with Macy's predicting sales of up to $20.75 billion this year, far exceeding the roughly $17 billion that Wall Street had been projecting. Macy's also expects adjusted earnings per share in the range of 40 cents to 90 cents for the year, much better than the $2.92 loss that analysts forecast, according to FactSet.

“Macy’s, Inc. anticipates 2021 as a recovery and rebuilding year as the company sets a foundation for growth, " the department store said in its release.

For the final fiscal quarter of the year that ended Jan. 30, Macy's reported profits of $160 million, or 50 cents a share. It was 80 cents per share if one-time costs are considered, and that was also far better than the per-share forecasts of 11 cents from industry analysts, according to a survey by FactSet.

It's still well below $340 million, or $1.09 per share, for the same period in 2019, the last before COVID-19 emptied retail stores nationwide. Since then, the New York company furloughed a majority of its employees. It began reopening stores in May, but the recovery has been painfully slow.

Quarterly sales were $6.78 billion, also edging out analyst projections. The company said business was driven by the home, beauty, jewelry and watch categories, growth in online sales and by acquiring new customers.

Sales at stores opened at least a year fell 17%, but online sales rose 21%. Elevated online sales may be here to stay. Macy's said Tuesday that it expects digital sales to reach $10 billion within the next three years and that the online side will become even more profitable.