Macy's holiday sales dropped, but beat Wall Street estimates, as stimulus checks and strong online demand cushioned the blow of the pandemic

• US retail store Macy's posted on Tuesday better-than-expected sales in the holiday quarter.
• Net sales fell to $6.78 billion, but this beat estimates of $6.50 billion.
• Macy's is betting on vaccine rollouts allowing customers to return to its department stores after pandemic curbs.

Macy's forecast 2021 sales largely above Wall Street estimates on Tuesday as it bet on vaccine rollouts allowing customers to return to its department stores after pandemic curbs.

The upbeat outlook from the US retailer follows better-than-expected sales in the holiday quarter as stimulus checks and strong online demand eased the blow from the health crisis.

The company expects sales between $19.75 billion and $20.75 billion for the full year, compared with analysts' estimates of $20.13 billion, according to IBES data from Refinitiv.

Retailers are tipped to benefit from another wave of stimulus-driven consumer spending in the coming months as the US Congress considers the Biden administration's support plan that includes sending a $1,400 check to households.

Same-store sales on an owned basis fell 17% in the fourth quarter ended Jan. 30, compared with Wall Street estimates of a 16.60% fall, according to IBES data from Refinitiv.

Online sales jumped 21% in the fourth quarter, driven by efforts to reduce delivery times and the use of stores to fulfill orders made on its website and app.

Net sales fell to $6.78 billion from $8.34 billion in the fourth quarter, but beat estimates of $6.50 billion.

Excluding one-time items, the company reported profit of 80 cents per share.

"Performance was driven by the home, beauty, jewelry and watch categories, growth in digital sales and by acquiring new customers," said Jeff Gennette, Macy's chairman and CEO, in a press release.

"We anticipate annual digital sales to reach $10 billion within the next three years," he added.