Macy's, Kohl's post strong results heading into holidays

NEW YORK (AP) — Department store chains Macy's and Kohl's delivered strong results for the fiscal third quarter as shoppers go back to buying dresses and other goods that fell to the bottom of the shopping list when the pandemic struck.

Macy's and Kohl's swung to a profit during the quarter as sales surged. Both companies raised their annual financial outlooks.

Macy's and Kohl's join a slew of other retailers posting strong sales as they grapple with surging costs and snarled supply chains heading into the holiday shopping season. They're rerouting shipping to less congested ports to get goods onto shelves. Still, Kohl's said that the delays have disportionately affected its women's business, and the department store is working to address the issue. Kohl's said some of the late merchandise may have to be packed up and used for another season. Both retailers said they don't think supply chain issues will be resolved until later next year.

Retailers like Macy’s are also paying higher wages and expanding benefits for its workers amid a tight labor market. Earlier this month, the department store said that it would a pay minimum of $15 per hour for new and current workers by May.

Macy's CEO Jeff Gennette also told investors on an earnings call that it has hired consulting firm AlixPartners to evaluate whether the retailer should spin off its e-commerce division from its stores, similar to what Saks Fifth Avenue did earlier this year. The move comes as it is under pressure from activist shareholder Jana Partners to split off the division to create better valuation.

Macy's earned $239 million, or 76 cents per share, for the three-month period ended Oct. 30. Adjusted earnings were $1.23 per share, easily topping Wall Street per-share projections of 31 cents, according to a...