Reuters has reported that Macy’s has pushed back against an activist investor who was trying to get the department store chain to spin off its e-commerce business. Macy’s reported a strong Q4, revealing a positive outlook for the company. The department store also announced a 2 billion dollar share buyback plan and raised its quarterly dividend 5 percent, sending shares up more than 8 percent in premarket trading.
Macy’s valuation has risen to 7.7 billion dollars from 6.9 billion dollars in October when Jana Partners was pushing for the company to spin off its e-commerce business. The approach was a similar one Saks took where their brick-and-mortar and Saks.com legally exist as two separate businesses and are listed as such on the stock exchange.
Jana has argued that Macy’s online business is worth multiple times Macy’s market capitalization. The investment firm recently cut their holdings in Macy’s by 84 percent. They previously held a 1.5 percent stake.
Macy’s has been making strategic investments in its e-commerce business for both its namesake brand Macy’s, and the other chains it owns, namely Bloomingdale’s and Bluemercury. This is proving to work well for the company after Q4 results.
FashionUnited previously reported that Macy’s, Inc.'s diluted earnings per share were 2.44 dollars, and adjusted diluted earnings per share were 2.45 dollars in the fourth quarter over 2 dollars that analysts were expecting. Revenue grew to 8.67 billion dollars from 6.78 billion dollars a year earlier, beating expectations for 8.47 billion dollars.