macy’s department store The department store operator on Wednesday lowered its full-year sales forecast, saying it was competing with selective shoppers and more promotions.
The retailer reported mixed quarterly results, with profit beating Wall Street expectations but revenue missing expectations.
Macy’s said it now expects net sales to be between $22.1 billion and $22.4 billion, down from its previous forecast of a range of $22.3 billion to $22.9 billion. That would also be down from the $23.09 billion it reported for fiscal 2023.
Macy’s expects comparable sales, excluding the impact of store openings and store closures, to decline by approximately 2% to approximately 0.5%. The company had expected comparable sales to fall about 1% to grow 1.5%. The metric includes owned and licensed sales, which include merchandise owned by Macy’s and brands that pay for its store space, as well as Macy’s third-party online marketplaces.
The department store operator said in a release that the new outlook range “provides flexibility to address ongoing uncertainty in the consumer discretionary market.”
In an interview with CNBC, CEO Tony Spring said customers are not spending freely on all Macy’s brands, even at high-end department store Bloomingdale’s.
“We’re seeing a shift in purchasing where there’s definitely weakness, caution and delays,” he said. “People are responding to what they want, what’s expensive, what’s novel, but even affluent consumers It won’t cost as much as it did a year ago.”
“There’s a lot of noise out there” that could distract customers or cause them to delay spending, including rising interest rates, inconsistent weather patterns and busy news cycles, he said.
Here’s how Macy’s fiscal second-quarter report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted 53 cents, expected 30 cents
- income: US$4.94 billion, expected US$5.12 billion
The company’s shares fell more than 9% in premarket trading.
The iconic department store is working hard to get back on a stable footing and continue to grow. Spring announced in February that the retailer would Closing approximately 150 (or nearly one-third) stores of the same name and investing in the remaining approximately 350 locations. It plans to close these locations in early 2027.
It is also newly opened, Smaller Macy’s store in suburban mall and Add new location Its better-performing brands include Bloomingdale’s and Bluemercury.
However, Macy’s recent quarter results show that it will be difficult for Macy’s to recover as consumers become more picky about their purchases, especially those items that are wants rather than needs.
Net sales fell from $5.13 billion a year earlier.
The namesake Macy’s brand remains the company’s worst-performing brand. Comparable sales on an owned plus licensed basis, including third-party markets, decreased 3.6%.
At Bloomingdale’s, comparable sales of owned and licensed, including third-party markets, fell 1.4%. Bluemercury’s comparable sales grew 2%, marking the beauty brand’s 14th consecutive quarter of comparable sales growth.
In the three months ended August 3, Macy’s net income was $150 million, or 53 cents per share, compared with a loss of $22 million, or 8 cents per share, in the same period last year.
However, even excluding weaker stores that Macy’s is closing, sales underperformed. Comparable sales for its forward namesake brand, which includes Macy’s stores that will remain open and online sales, fell 3.3% on an owned-plus-licensed basis, which includes third-party markets.
Macy’s stresses progress on its turnaround plan Unveiled in February shortly after spring Get to the top of the company. Among the top 50 stores that received the additional investment, comparable sales of own plus licensed products increased by 1%. This marks the second consecutive quarter of positive comparable sales growth at these stores since the launch of the program.
Spring said the 50 stores are performing better than other Macy’s locations, even in hard-hit categories like handbags. He said the company will share plans to expand the strategy beyond those stores in the fourth quarter, but it has decided to increase staffing in the women’s shoe and handbag departments at more locations because of customer response.
In addition to a volatile sales environment, Macy’s leaders face demands from an activist group to take the company private. Macy’s said last month that its board of directors unanimously agreed decided to end negotiations In partnership with Arkhouse Management and Brigade Capital.
Macy’s closed Tuesday at $17.74, giving the company a market value of $4.9 billion. As of Tuesday’s close, the company’s shares were down about 12% year to date. That lagged the S&P 500’s gain of about 17% during the same period.
