The Yahoo Finance Live team discusses Macy's earnings report and the company's outlook for 2023.
Video Transcript
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SEANA SMITH: All right, let's talk about one of the big movers of the day, one of the big stories, and that's Macy's. Shares skyrocketing here, closing up just about 11% after reporting better than feared earnings results. But the retailer did highlight some areas of growth here, specifically in the luxury consumer, with spend within the loyalist program at Bloomingdale's rising 7%. Here's what CEO Jeff Gennette had to say about the trends that he's seeing on today's earnings call.
JEFF GENNETTE: But when you think about share of wallet, we have opportunity to capture more, and particularly that top of the list. And that luxury consumer, they're really spending where there's scarcity and where there's specialness.
SEANA SMITH: So Macy's going to rely on that luxury consumer, the higher end consumer, it looks like, at least over the next several months, Dave, because when you dig down into these results, clearly Bloomingdale's and Blue Mercury were the outperformers here.
DAVE BRIGGS: Yeah, we have continued to notice a trend with makeup, and Blue Mercury saw sales increase 7.2% in the quarter. We saw that with Target. We've seen it with other retailers. Is it becoming essential? I mean, it appears to be that way. And I think we saw that trend start to tip in the midst of COVID. Now, we can't help but wonder, that leaning into the luxury consumer, what does that mean?
As we turn the page here shortly to Nordstrom earnings, will they see a solid report based on that similar shift? You sure would think that we would see a similar lesson learned. Now, I also want to point out one other thing Gennette said when he said that the company was "competitive but measured in our promotions." He says they took strategic markdowns, intentionally did not chase unprofitable sales. And it sounds like he's talking about Kohl's. So Macy's margins fell just two percentage points. Kohl's fell 10% in terms of their margins. So those who do chase those sales-- we saw that with Dick's Sporting Goods as well-- are paying for it in their quarterly earnings.
SEANA SMITH: Yeah, they certainly are paying for it. It's also important to put these results in perspective here because, remember, Macy's warned not too long ago, what, it was in January, that their holiday numbers were going to disappoint. We saw that reflected in the stock price at that time. So yes, we are seeing a big jump today. But a lot of the, I guess, not too hot results that we did get this morning have already been priced in.
Because when you take a look at total same-store sales, that key metric here for any retailer, but specifically for Macy's, falling 2.7%. Sales at its namesake brand, Macy's falling just about 3% here. So I think a lot of that was better than feared at least, and that's why we're seeing those shares rise today.
In terms of the Street's reaction, they were actually pretty pleased with these results. Dana Telsey over at Telsey saying that it was a nice Q4 beat, and really saying that management deserves credit for operational discipline in a very volatile macro environment, which I also think points to the point that you were just making about the promotional activity and really holding back on some of those discounts.
DAVE BRIGGS: It's a great point because this is terrific operations. I think you could even say a similar thing about Best Buy. We knew the electronics market was devastating, televisions, whatnot. They seemed to operate through a bad environment. And you're certainly seeing that here with Macy's, although the guidance don't look great. A lot of the retailers we're hearing warn about some choppy times to come. They think sales could fall around 3% in 2023. So could be a bumpy road. But the way they're operating, they might just be fine.
