Residence Depot, Macy’s Anticipate Procuring Developments to Proceed, for Now

Residence Depot Inc. HD -3.12% and Macy’s Inc. M 3.93% mentioned pandemic-fueled procuring tendencies have continued into 2021, driving demand for residence enhancements and residential items. Executives at each chains additionally mentioned shopper spending may shift within the second half of the 12 months relying on the course of the well being disaster.

The 2 retailers have been on reverse sides of the Covid-19 pandemic. Residence Depot’s income elevated 20% within the firm’s newest fiscal 12 months as People spent extra time—and cash—fixing and renovating their properties. Annual gross sales at Macy’s tumbled practically 30% as customers purchased much less attire for going outdoors, together with to work.

“The sturdy and constant demand setting we’ve seen over the previous 9 months has continued into February,” mentioned Richard McPhail, Residence Depot’s finance chief.

Nevertheless, the corporate declined to offer a forecast for the complete 12 months citing uncertainty concerning the coronavirus, the distribution of vaccines and financial coverage. “We’re restricted in our potential to forecast demand for the 12 months, significantly because it pertains to the again half,” Mr. McPhail mentioned Tuesday.

Macy’s Chief Govt Jeff Gennette mentioned he expects the department-store chain’s attire enterprise to get well towards the second half of the 12 months, as extra folks get vaccinated and begin planning occasions like weddings and going again to workplaces.

“What we’re anticipating is that we’re going to see a lot of what we noticed within the fourth quarter going by means of the primary half,” Mr. Gennette advised analysts on Tuesday. “We count on that the house companies are going to proceed to be sturdy. After which while you have a look at among the luxurious companies that clients have been spending on, like wonderful jewellery and fragrances, some on designer skincare, all these classes are sturdy.”

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Mr. Gennette mentioned he sees customers doing a lot of their procuring on-line even after the pandemic abates. Macy’s expects digital gross sales to achieve $10 billion inside the subsequent three years. Mr. Gennette has been targeted on lowering prices related to digital gross sales, which accounted for 44% of Macy’s internet gross sales in the latest quarter.

Macy’s returned to a revenue within the vacation quarter—its fiscal fourth quarter—after shedding greater than $four billion the primary 9 months of the 12 months. Internet revenue within the three months to Jan. 30 totaled $160 million, in contrast with $340 million a 12 months earlier. Gross sales for the quarter fell 19% to $6.eight billion.

Residence Depot’s income in its fiscal fourth quarter was $32.26 billion, a 25% improve. The corporate’s revenue rose 15% to $2.86 billion, because the chain incurred increased prices.

The house-improvement chain’s digital gross sales continued to speed up, leaping 83% 12 months over 12 months within the newest interval, as extra consumers used on-line ordering throughout the pandemic, Chief Govt Craig Menear advised analysts on a convention name.

Greater spending on big-ticket gadgets similar to home equipment, vanities and flooring additionally helped drive the corporate’s progress within the quarter. Gross sales to clients engaged on do-it-yourself initiatives continued on the sturdy tempo the corporate set earlier in 2020, whereas gross sales to skilled clients notched sooner progress than throughout earlier phases of the pandemic.

Mr. McPhail estimated that if late-2020 demand ranges proceed into this 12 months, comparable gross sales—a determine that corrects for modifications in retailer rely—will probably be flat or barely optimistic in 2021. On that foundation, Residence Depot’s gross sales rose about 20% in 2020.

Write to Matt Grossman at matt.grossman@wsj.com and Suzanne Kapner at Suzanne.Kapner@wsj.com

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