Macy’s Beats Q1 Earnings Estimates, Turnaround Plan Shows Early Progress
Macy’s fiscal first-quarter earnings topped Wall Street’s expectations on Tuesday, reports CNBC. The retailer’s revenue came in roughly in line with revenue expectations as it pointed to early signs of momentum in its turnaround strategy. The department store operator raised its full-year earnings expectations to reflect the first-quarter beat, along with the low end of its sales outlook. However, Macy's said in a news release that it “assumes customers will continue to be discerning in their discretionary purchases.”
For the three-month period that ended May 4, Macy's reported 27 cents adjusted earnings per share vs. Wall Street's expected 15 cents, and $4.85 billion in adjusted revenue vs. $4.86 billion expected. Its first-quarter net income tumbled 60 percent to $62 million, or 22 cents per share, compared with $155 million, or 56 cents per share, in the year-ago quarter. Net sales fell from $4.98 billion in the year-ago period. Macy’s now anticipates net sales of between $22.3 billion and $22.9 billion, which would still represent a drop from $23.09 billion in 2023.
Total Retail's Take: Macy's customers are showing early signs of responding to its Bold New Chapter turnaround strategy. At Shoptalk 2024 in Las Vegas earlier this year, new CEO Tony Spring shared the three core pillars of the initiative: strengthen the Macy's nameplate, accelerate luxury growth, and invest in end-to-end operations. While the department store is planning to close about 150 of its stores, or more than a quarter of its namesake locations, and cut more than 2,300 jobs in January, it is investing in parts of the business that have fared better. For example, it's focusing on the roughly 350 Macy’s stores that will stay open, plans to open more Bloomingdale’s and Bluemercury locations, and launch smaller Macy’s stores in suburban strip malls.
On an earnings call with investors, Spring said the company is in the “early innings” of turning around its namesake stores. As the retailer has stepped up investments at 50 of its Macy’s stores, customers have responded by visiting more often and buying more when they do, he said. "Although early days, our investments in product, presentation and experience are gaining traction and reinforce our belief that longer term Macy’s, Inc. can return to sustainable, profitable growth.”
- Companies:
- Macy's
- People:
- Tony Spring
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
