Macy’s Inc on Tuesday raised its forecast for annual sales and earnings, betting on pent-up demand as shoppers vaccinated for the coronavirus return to stores to upgrade their wardrobes and splurge on luxury goods.

The New York-based retailer’s shares, up 70 percent so far this year, gained about 6 percent before the opening bell after it reported a surprise first-quarter profit and its comparable sales beat Wall Street estimates.

The department store chain, which also owns Bloomingdale’s and beauty store chain Bluemercury, is benefiting from easing restrictions, relief checks and a return to normalcy as people attend events and get back to offices after a year of staying at home.

“We are seeing promising signs that our core customers are shopping again, and we continue to attract new customers,” chief executive officer Jeff Gennette said.

People are shopping for fine jewellery and watches, fragrance and luxury items, and “special occasion categories” have seen an improvement as customers return to a pre-pandemic lifestyles, Gennette said.

Macy’s is placing its bets on big investments in new stores and technology to draw customers at a time when more people are shopping online.

The company forecast adjusted earnings per share between $1.71 and $2.12 for 2021, compared with its earlier outlook of 40 cents to 90 cents.

It expects sales between $21.73 billion and $22.23 billion, much higher than the $19.75 billion to $20.75 billion range it forecast earlier.

For the first quarter, sales at owned and licensed stores that have been open for at least a year surged 63.9 percent in the first quarter, and were better than estimates of 48.1 percent growth, according to IBES data from Refinitiv.

On an adjusted basis, it earned 39 cents per share, compared with a loss of 41 cents forecast by analysts.

By Nivedita Balu; Editor: Vinay Dwivedi