Image: Macy’s, Inc.
(Reuters) – Department store operator Macy’s Inc reported a marginal fall in holiday period same-store sales on Wednesday, surprising investors who were bracing for a sharper drop following an earlier profit warning.
The New York-based company’s shares rose about 4% to $18.32, a near five-month high.
Macy’s, which cut its annual profit forecast in November blaming weak international tourism and sluggish mall traffic, is among the first major corporate names to report sales for the holiday season – seen as a barometer for the health of U.S. consumer spending.
The company reported a 0.6% drop in comparable sales at its owned and licensed stores for the months of November and December, roughly two-thirds of the fourth quarter. Analysts were expecting a 1.8% fall in the quarter, according to IBES data from Refinitiv.
“It’s bit of a relief for investors, as they were concerned sales were going to be down more than that,” Ken Perkins, founder of research firm Retail Metrics told Reuters.
Given the traffic at stores did not look particularly great during the holidays, the number looks good, Perkins said, but showed concern about the company’s profit margins due to the heavy level of discounts during the season.
Macy’s Chief Executive Officer Jeff Gennette said the holiday sales benefited from strong online sales and demand for gift products, as well as a complete revamp of about 150 stores with fresh interiors and better merchandise.
U.S. consumers are increasingly spending more money online rather than queuing up at physical stores during the holiday season, forcing traditional brick-and-mortar retailers to build their apps with more shopping and delivery options.
U.S. e-commerce sales in the period from Nov. 1 through Christmas Eve rose 18.8%, according to a Dec. 25 report by Mastercard Inc, while overall holiday retail sales, excluding autos, rose just 3.4%.
Consumer spending in the country is benefiting from wage growth and the lowest unemployment rate in nearly half a century.
Earlier in the day, Apple Inc said its customers spent $1.42 billion in its App Store between Dec. 24 and Jan. 1, a 16% increase over the previous year.
Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli.