Macy’s Inc stocks jumped by 5% on Thursday after the department store posted positive earnings results, upping its annual forecast for 2023 as a result.
The retail chain’s earnings were largely boosted by its decision to offer steep discounts during the holiday period in an effort to get rid of excess inventory and attract consumers amid steep inflation. According to Chief Executive Jeff Gennette, these promotions were “competitive but measured.”
Despite tight economic conditions, Macy’s was able to limit its decline in profit for the period. Its 34.1% margin was just a 2% decline; a fall that was minor in comparison to competitors such as Kohl’s Corp, which took a 10 percentage point hit.
Following the sale of large volumes of excess inventory, the retail group will look to dial back on its promotions, refocusing its efforts on expanding profit margins.
Despite other retailers such as Walmart Inc and Target Corp making more cautious forecasts in the face of unwavering inflation, Macy’s has remained cautiously optimistic. It forecasts an adjusted full-year profit per share between $3.67 and $4.11, with full-year sales projected to be between $23.7 billion and $24.2 billion.