(Reuters) - Macy’s Inc raised its full-year profit forecast on Wednesday and reported better-than-expected quarterly and same-store sales, helped by strong international tourism spending, a new loyalty program and a greater assortment of products offered in stores.
The U.S. department store chain also issued comparable sales growth guidance that topped estimates, boosting its shares 10 percent to $32.92 by midday.
“Tax cuts, bonuses and good tax refunds have all been a windfall to consumers who have responded by increasing spending,” said Neil Saunders, managing director of GlobalData Retail. “This rising tide has floated most retail boats, Macy’s among them.”
Like its peers, the Cincinnati, Ohio-based department store chain faltered in the past few years as it struggled to adjust to a fiercely competitive retail landscape where shoppers buy more goods online. Macy’s closed more than 100 stores since 2015 and cut thousands of jobs as mall traffic plummeted and customers defected to off-price and fast-fashion sellers.
Macy’s also said it would end a joint venture agreement with Fung Retailing Ltd in China but would remain active on Alibaba’s e-commerce platform TMall as well as social media channels.
Chief Executive Officer Jeff Gennette said on an earnings call the company saw double-digit growth in its digital business and continued healthy consumer spending. It also had significant improvements in international tourism, which was up 10 percent - its best numbers since 2014.
“We have the digital growth obviously percolating and we are driving that very successfully,” Gennette said. “Brick-and-mortar needed a lot of work.”
Macy’s changed its loyalty program by opening