Macy’s CEO Jeff Gennette told CNBC on Tuesday that the surge in US Covid-19 vaccinations is already having a positive impact on the company’s return on sales.
Gennette said business from loyal Macy customers was already up 10% over the company’s fiscal year fourth quarterthat ended in late January. Macy’s is only two months into the current fiscal quarter.
“This is clearly the vaccine that is taking root,” he told CNBC’s Jim Cramer in a “Bad money“Interview”. We’re still looking conservatively this year. We’re more conservative in the front half than we are in the back half, but it’s positive momentum we’re bringing into this quarter. “
Macy’s announced in its fourth quarter report that it had reached 7 million new customers during that period, of which 4 million came through digital channels. Gennette said Tuesday that the growth was in large part driven by younger and online shoppers, who spent 8% more on Macy’s products year-over-year.
Some of that momentum has been sparked by recent rounds of stimulus checks, the executive said.
“They’re younger, they’re more diverse,” he said of Macy’s latest buyer. “The good news is that when they start vaccinating, the trend for major customers … will improve. [We’re] start seeing activity digitally and in stores. “
Macy’s reported that online sales were up 21% and accounted for 44% of net sales in the most recent quarter. The retailer’s brick and mortar challenges were multiplied as more consumers flocked to the internet to shop.
However, the company has stepped up its e-commerce efforts. According to Gennette, Macy’s developed a “hard fulcrum” for online business over the past year, trying to leverage its physical locations, which are where 25% of digital orders are fulfilled.
The digital business grew 25% last year from $ 6 billion in 2019. The company hopes to grow that to $ 10 billion over the next three years, Gennette said.
“What people may not know is that we are number 2 in our categories in the nation and were able to hold our market share in 2020,” he said. “Digital is made possible by strong bricks and mortar”