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People walk past a Macy’s store in a Manhattan shopping district on August 12, 2020 in New York City.
Spencer Platt | Getty Images

Macy’s on Tuesday reported a surprise profit, as stimulus checks and the ongoing Covid vaccine rollout gave consumers more money and greater confidence to head back to the mall and refresh their wardrobes.

The department store chain hiked its financial outlook for the full year, building on the momentum it’s seeing online and as customers return to its shops to buy new outfits for weddings, travel and other special occasions.

Macy’s shares jumped nearly 6% in premarket trading.

“We are seeing promising signs that our core customers are shopping again, and we continue to attract new customers,” Chief Executive Jeff Gennette said in a statement.

During the quarter ended May 1, Macy’s swung to a profit of $103 million, or 32 cents per share, compared with a loss of $3.6 billion, or $11.53 per share, a year earlier.

Excluding one-time charges for impairment and restructuring, the early retirement of debt and income tax impact, Macy’s earned 39 cents per share. Excluding further gains from real estate sales, it earned 38 cents a share. Analysts were looking for a 41-cent loss.

Net sales grew to $4.71 billion from $3.02 billion a year earlier. That exceeded expectations for revenue of $4.37 billion.

Total comparable sales were up 62.5%, topping estimates for 44.9% growth, according to FactSet.

Digital sales were up 34% year over year, and grew 32% from 2019 levels.

In the year-ago period, Macy’s sales tumbled 45% as the Covid pandemic forced its stores temporarily shut and shoppers shifted their spending toward groceries and cleaning supplies, and away from clothing and footwear.

Macy’s is now calling for net sales in fiscal 2021 to fall within a range of $21.73 billion to $22.23 billion, up from a prior range of $19.75 billion to $20.75 billion.

It estimates it will earn between $1.71 to $2.12 per share, after adjustments. Previously, it expected adjusted earnings of 40 cents to 90 cents per share.

As of Monday’s market close, Macy’s shares are up more than 70% year to date. The retailer has a market cap of $6 billion.

Find the full earnings press release from Macy’s here.

This story is developing. Please check back for updates.

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