Shares of Macy’s fell in pre-market trading on Thursday after the major retailer reported mixed fourth quarter earnings and a downbeat outlook for sales, citing “external uncertainties.”
Macy’s said its sales slid by 4.3% to $7.7 billion for its latest quarter, falling just shy of analysts’ expectations of $7.78 billion, according to estimates compiled by FactSet (FDS+0.16%). Adjusted earnings totaled at $1.80 per share for the quarter, above the $1.54 per share Wall Street had expected. Profit came in at $342 million, compared with a $128 million loss a year earlier.
Across Macy’s business — including the flagship Macy’s stores, Bloomingdale’s, and Blue Mercury (M-0.37%) — comparable sales fell 1.1%, while comparable sales across its owned and licensed businesses grew 0.2%. The department store giant said comparable sales at its First 50 stores — locations that it is investing in as part of a new strategy — grew by 0.8%, increasing for the fourth consecutive quarter.
Although the earnings show that Macy’s turnaround is making some progress, its soft expectations for its fiscal 2025 earnings disappointed investors.
New York-based Macy’s forecasted net sales between $21 billion and $21.4 billion, compared to Wall Street’s expected $21.3 billion. The guidance includes a $700 million hit from the closure of 64 Macy’s stores in 2024. Adjusted earnings per share are expected to come out to between $2.05 and $2.25 per share, below the $2.29 per share expected.
Macy’s said it would continue to close underperforming stores in 2025, noting that it expects “fundamental improvements’ in 125 locations that have been picked out to work on. It expects those improvements to be offset by the roughly 225 stores that are either planned to be shut down or have not yet benefited from Macy’s new strategy, which includes hiring more staff and better product displays.
“On a quarterly basis, the company does not expect its results to be linear as the year progresses, which is a reflection of the year two initiatives gaining traction, comparability impacts and the timing of asset sale gains,” Macy’s said in a statement.
The company also said that it is taking a “prudent approach” to guidance for the year, citing external uncertainties that it and customers are facing. That includes the threat of tariffs, which are poised to slam consumer confidence and raise prices on goods across multiple industries.
Fellow retailers ranging from Best Buy (BBY+0.44%) and Target (TGT-0.50%) to Walmart (WMT+1.06%) and Abercrombie & Fitch (ANF-9.24%) have issued more conservative guidance or warned of potential negative effects to their operations as a result of tariffs.
“I don’t think the consumer is going to feel a sense of relief in the short term,” Macy’s CEO Tony Spring said on an earnings call after noting that the company has to lean in to providing “retail therapy” and an escape from politics.
Macy’s shares fell as much as 5% in pre-market trading on Thursday, sending the stock down to its lowest point in over a year, but are now down by less than 4%. The stock dropped by more than 19% year-to-date through Wednesday.
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