Macy’s, Inc. Reports Q4: EPS Beats Guidance, Net Sales Decline

Macy’s, Inc. (NYSE: M) reported its financial results for the fourth quarter of fiscal year 2024, showcasing mixed outcomes. The company achieved a GAAP diluted earnings per share (EPS) of $1.21, while its adjusted EPS stood at $1.80, surpassing its prior guidance range.

However, net sales for the quarter fell by 4.3% to $7.8 billion, with comparable sales down 1.1% on an owned basis but up slightly by 0.2% when including licensed and marketplace sales. This nuanced performance reflects the varied success across different segments of Macy’s operations. The company’s First 50 locations reported a 0.8% increase in comparable sales on an owned basis, and a 1.2% rise when including licensed sales.

Bloomingdale’s and Bluemercury outperformed, with Bloomingdale’s recording a 4.8% growth in owned comparable sales and 6.5% when including licensed and marketplace sales. Bluemercury continued its growth trajectory with a 6.2% increase in comparable sales.

Despite these successes, the overall sales decline was primarily due to underperformance in non-First 50 and non-go-forward locations. Macy’s ended the year with $1.3 billion in cash, up $272 million from the previous year, and generated nearly $1.3 billion in operating cash flow. The company also announced plans to resume share buybacks, contingent on market conditions, under its remaining $1.4 billion share repurchase authorization.

Macy’s, Inc. Reports Mixed Results for Fourth Quarter

The fourth quarter results for Macy’s, Inc. revealed a performance that exceeded some expectations but fell short in other areas. Analysts had anticipated an EPS of $1.54 and revenue of $7.78 billion. While the adjusted EPS of $1.80 surpassed expectations, the net sales aligned closely with projections at $7.8 billion, indicating a balance between exceeding earnings forecasts and meeting revenue expectations.

Macy’s comparable sales performance was a mixed bag, with a 1.1% decline on an owned basis but a slight increase of 0.2% when including licensed and marketplace sales. This indicates a stronger performance than anticipated in areas where Macy’s has expanded its sales channels. However, the overall decline in net sales highlights challenges in certain segments, particularly in non-First 50 and non-go-forward locations.

Bloomingdale’s and Bluemercury were standout performers, with significant growth in comparable sales, suggesting that Macy’s strategic investments in these segments are paying off. The First 50 locations also contributed positively, reinforcing the company’s focus on enhancing customer experiences in key locations. However, the overall performance against expectations indicates areas where Macy’s needs to bolster its strategy to address underperforming segments.

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Macy’s, Inc. Expects Net Sales Between $21B and $21.4B for Fiscal Year 2025

Looking ahead, Macy’s, Inc. has provided its fiscal year 2025 guidance, projecting net sales between $21.0 billion and $21.4 billion. The company expects a decline in comparable owned-plus-licensed-plus-marketplace sales of approximately 2.0% to 0.5% compared to 2024.

Macy’s also forecasts an adjusted EBITDA as a percent of total revenue ranging from 8.4% to 8.6%, with core adjusted EBITDA slightly lower at 8.0% to 8.2%. Adjusted diluted EPS is expected to be between $2.05 and $2.25, not accounting for potential future share repurchases. The guidance indicates a focus on stabilizing operations while pursuing profitable growth, aligning with the company’s strategic objectives.

The company remains committed to its Bold New Chapter strategy, emphasizing customer experience, operational excellence, and prudent capital investments. As Macy’s navigates fiscal year 2025, its guidance reflects a blend of caution and optimism, aiming to leverage successful initiatives while addressing areas needing improvement. This approach is designed to drive long-term growth and enhance shareholder value.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.