Macy’s Numbers Are Through the Roof, How Long Till They Fall?

To make up for the pandemic’s effects, Macy’s (NYSE:M) had to enforce several decisions that would reduce operating expenses significantly. Lucky for them, they proved successful enough to make their profits soar through the sky.

Believe it or not, their share prices managed to grow by 138% over the course of 2021. Making Macy’s one of the year’s most beloved stocks. 

Nonetheless, the company had also built up a reputation for being incapable of growing in past years. How long can they keep up this streak going?

Customers Like Macy’s New Business Model, and It Shows

For the most part, Macy’s measures involved shifting their operations to a digital model. This way, they could counterbalance the low sales numbers of their physical locations. And guess what? Customers loved that idea.

Coming from 2019, Macy’s online sales managed to grow by 49%. That also is a 19% increase coming from 2020. Keep in mind, these figures are all taken from each year’s respective third quarter.

More so, management has also shared the following information. In regions where Macy’s has at least one physical store, their digital sales numbers are always three times higher in comparison. And that’s not even the best part. 

When first implementing this idea, there was this ever-present fear of shipping costs taking away from their profits. Surprisingly, they’ve never reached that point. Their sales numbers stand at an ideal balance where they’re always earning money on top of that expense.

In other words, their digital front is not on comparable terms with their regular stores anymore. By now, it’s a straight-up stronger asset.

So, Can They Keep This Success Streak?

Short answer, yes.

Nowadays, these changes have indeed reduced Macy’s operating expenses. They’re now saving up to $630 million USD on an annual basis. Not only that, but these changes have also increased their profits, as you just read.

Overall, Macy’s most fundamental numbers are the ones that have gone through the biggest changes. Luckily, changes are on the positive side, leading us to believe that they could retain this success streak rather easily.