E-commerce accounts for 44%, Macy's shifts its focus to online sales

Despite double-digit growth in online bookings, same-store sales at Macy's fell 17.1% from the same period last year. Macy's said 2021 will be a year of recovery and reconstruction.

Mall retailers like Macy 's have increasingly ceded sales to online platforms like Amazon and apparel brands like Lululemon.

Macy 's said it expects 2021 to be a year of recovery and rebuilding as it moves past the losses it suffered during the pandemic . It offered an outlook that foresaw continued obstacles from the health crisis during the spring, with momentum gradually escalating in the second half of 2021.

Macy ’s said same-store sales at its own and franchise locations fell 17.1% from 2019. The decline was 21.3%, according to Refinitiv data.

E-commerce sales grew 21% during the period . Digital sales accounted for 44% of net sales, and about a quarter of Macy's digital sales came from its stores during the quarter, the company said.

The company said it had nearly 7 million new customers in the fourth quarter , many of them under the age of 40, who shopped online .

“The digital engine that we have is bringing us a lot of new customers who are shopping more and more digitally, ” Macy’s CEO Jeff Gennette said.

Neil Saunders, managing director of retail at GlobalData, said that while Macy's is recovering, its performance is still lagging significantly behind other retail sectors, especially those that are less dependent on apparel sales.

“Given Macy’s focus on apparel, if it can’t get that part of the business working, its long-term prospects are bleak,” he said. “A few small wins in individual categories weren’t enough to offset the broad weakness in the rest of the business.”

Macy ’s said its apparel sales fell 33% in the fourth quarter. But it said it’s betting on a recovery in the category, especially in the second half of 2021, as more Americans resume pre -pandemic activities and as hopes build around the ongoing vaccine rollout.

Looking ahead to fiscal 2021, Macy's forecast sales between $19.75 billion and $20.75 billion , compared with its previous estimate of annual revenue of $20.13 billion.

Notably, the forecast currently does not anticipate a recovery in tourism this year. Macy's said international tourism accounted for just over 4% of total sales in 2019.

Digitalization is playing a larger role in the business of many retailers, including Macy's, as the pandemic has accelerated the shift.

The company said it expects annual sales from the online store to exceed $10 billion within three years as the department store operator expects shoppers' preference for Internet purchases to last beyond the health crisis. It also plans to make its online business more profitable.

In its search for new revenue streams and in hopes of offsetting the added expenses that come with digital transactions, Macy’s said it launched a new media network this quarter that has grown to generate more than $35 million in annual revenue.

E-commerce

North America

Macy's

Online Sales