Shares of Macy's (M 8.01%) fell 5% on Tuesday, following the department store chain's fourth-quarter earnings report.
Macy's net sales rose 28% year over year to $8.7 billion. The retailer experienced a 27.8% rise in its comparable-store sales at its owned and licensed stores, as customers returned in droves.
Meanwhile, Macy's online operations continued to grow at an impressive clip, with digital sales up 12% compared to the year-ago period and 36% versus the fourth quarter of 2019.
"I am proud that Macy's, Inc. outperformed expectations on both the top and bottom lines every quarter in 2021, despite COVID-19 related disruptions, supply chain issues, labor shortages, and elevated inflation," CEO Jeff Gennette said in a press release.
Better still, price hikes helped to boost Macy's gross margin by 2.8 percentage points to 36.5%. The company's cost-savings program further improved operating margins.
All told, Macy's adjusted net income nearly tripled to $745 million, or $2.45 per share. That was well above Wall Street's estimates, which had called for per-share profits of $2.
But investors appeared to focus on Macy's rejection of calls to separate its e-commerce business from its traditional retail operations. Some activist shareholders believed that such a split would result in two separate businesses that would be valued more highly in the market than they currently are as one combined entity.
Instead, Macy's will continue to invest in its omnichannel initiatives, which reach across its stores and websites. Management noted that people who shop both in its stores and online tend to spend roughly three times as much as those who use just one shopping channel.
"We are confident in our path forward as one integrated company," Gennette said during a conference call with analysts.