Macy’s Inc. (M) stock prices surged by 13.44% just before market trading commenced on August 19th, 2021. This brought the price per share down to USD$20.51 early on in the trading day.
Solid Liquidity Position
The second quarter of fiscal 2021 ended with M stock reported roughly USD$2.1 billion in cash. The solid liquidity position allows the company to execute on its two priorities. These priorities are the driving of profitable growth with appropriate investments while de-levering the balance sheet. Their liquidity position will also facilitate the reinstatement of the company’s regular quarterly dividend. Valued at USD$0.15 per share, this will result in an annual return of cash to shareholders in the amount of nearly USD$200 million.
M Stock’s Share Repurchase Program
M stock also announced during the second quarter of fiscal 2021 that its board of directors had authorized a share repurchase program. The program will see the company purchase up to a total of USD$500 million worth of shares over time. The company also announced having voluntarily repaid USD$1.3 billion in Senior Secured Notes on August 17th, 2021. As a result of this move, the company now forecasts exceeding its target leverage ratio. The expected ratio will be no more than 2.5x by the end of fiscal 2021, as per M stock’s projections.
Adapting to the Pandemic
The ongoing global pandemic continues to cause uncertainty, but, despite this, M stock managed to increase the traction of its Polaris strategy. The strong performance shown by the second quarter of 2021 inspires confidence that translated into a material increase in full-year guidance for 2021. The company has also adjusted its long-term Adjusted EBITDA margin target, expected low double digits at the start of the next fiscal year.
M Stock’s EPS Reports
Earnings per share came out to USD$1.08 per diluted common share and Adjusted diluted earnings per share in the amount of USD$1.29. Both reports surpass previously announced guidance for the quarter. The second quarter of fiscal 2020 saw M stock report diluted earnings per share and Adjusted diluted EPS in the amount of USD$0.28.
Future Outlook for M Stock
The company reported a strong quarter which has set the stage for a continued trajectory of success. M stock is keen to leverage the resources at its disposal to drive organic growth over the long term. Current and potential investors are hopeful that this will translate into consistent increases in shareholder value over time.
