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Macy’s CEO Jeff Gennette told CNBC on Tuesday that the rise in U.S. vaccinations against Covid-19 is already having a positive effect on the company’s bottom line.
Gennette said the business of Macy’s loyal customers was already up 10% from the company’s fiscal fourth quarter, which ended in late January. Macy’s is only two months away from its current fiscal quarter.
“It’s clearly the vaccine that’s starting to take hold,” he told CNBC’s Jim Cramer in an interview with “Mad Money.” “We still have a conservative outlook for this year. We’re more conservative in the front half than in the back half, but it’s a positive dynamic that we’re bringing into this quarter with us.”
Macy’s said in its fourth quarter report it reached 7 million new customers during this period, including 4 million through digital channels. Gennette said on Tuesday the growth was largely driven by younger and online shoppers, who were spending 8% more on Macy’s products year over year.
Some of that momentum was sparked by the latest rounds of stimulus checks, the executive said.
“They’re younger, they’re more diverse,” he said of Macy’s new buyers. “The good news is that the tendency of the primary client … improves as they start to get the vaccine. [We’re] start to see activity digitally and in stores. “
Macy’s said online sales grew 21% and accounted for 44% of net sales in the last quarter. The physical challenges of the retailer have increased as more and more consumers have flocked to the internet to shop.
However, the company has stepped up its e-commerce efforts. Gennette said Macy’s has designed a “hard hub” to the web over the past year and is looking to take advantage of its physical locations, where 25% of digital orders are fulfilled.
Digital activity grew 25% last year, from $ 6 billion in 2019. The company hopes to increase that figure to $ 10 billion over the next three years, Gennette said.
“What people may not know is that we are No. 2 in our categories in the country and that we were able to maintain our market share in 2020,” he said. “Digital is made possible by strong bricks and mortar”
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