Macy’s reported mixed quarterly results on Thursday, reflecting both progress and ongoing challenges as CEO Tony Spring works to revitalize the business. The company is under scrutiny from yet another activist investor pushing for a potential privatization. During the critical holiday quarter, comparable sales across Macy’s, Bloomingdale’s, and Blue Mercury fell by 1.1%. However, when including owned, licensed businesses, and its online marketplace, comparable sales rose by 0.2%, marking the highest growth since Q1 2022. Additionally, the “First 50” stores, which are central to Macy’s turnaround strategy, saw a 0.8% increase in comparable sales, continuing a positive trend for the fourth consecutive quarter. These developments suggest that Macy’s efforts are yielding some results, though progress may be slower than anticipated. For fiscal 2025, Macy’s forecasts adjusted earnings per share between $2.05 and $2.25, with sales ranging from $21 billion to $21.4 billion, below Wall Street’s expectations of $2.31 per share and $21.8 billion, according to LSEG. In Q4, Macy’s reported adjusted earnings per share of $1.80, surpassing expectations of $1.53, while revenue reached $7.77 billion, slightly below the anticipated $7.87 billion. Net income for the quarter ending February 1 was $342 million, or $1.21 per share, compared to a loss of $128 million, or 47 cents per share, a year earlier. Sales declined by approximately 4% to $7.77 billion from $8.12 billion, partly due to an extra selling week in the prior year. Bloomingdale’s and Blue Mercury continued to perform well, with comparable sales growth of 4.8% and 6.2%, respectively. However, the Macy’s flagship brand lagged, with comparable sales down 1.9%. To address longstanding issues, Spring has initiated an aggressive plan, including closing 150 stores and revitalizing better-performing locations. Investments in 50 key stores have shown early success, but extending this strategy to the remaining 350 locations will require time and capital. In December, activist investor Barington Capital urged Macy’s to cut costs, explore selling luxury brands, and reassess its real estate portfolio. Macy’s announced plans to resume share buybacks under its $1.4 billion authorization, pending market conditions. Adrian Mitchell, Macy’s COO and CFO, emphasized the company’s commitment to enhancing customer experience, operational excellence, and prudent capital investments. — news from CNBC
